canada loose diamonds

The use of popular culture to spur political debate always stirs strong emotions. People have been taking sides since the release of the movie "Blood Diamond" starring Leonardo DiCaprio last month. The movie is set in 1999 during Sierra Leone's brutal civil war. DiCaprio plays a ruthless man who trades diamonds for arms. He is forced to re-examine his conscience when he agrees to help a black fisherman (played by Djimon Hounsou) whose family has canada mine

been swept up in the violence. At stake is a rare pink diamond with which the fisherman hopes to secure a peaceful future for his family.

De Beers Canada employee Lesley Coldham holds the largest uncut diamond ever displayed in Canada, at the Prospectors and Developers Association of Canada Convention in Toronto in this March 8, 2005 file photo.

My informal movie reviewer said "Blood Diamond" is a powerful movie filled with graphic violence. No wonder it has caught the attention of both the public and the diamond industry. North American viewers must be overwhelmed by the brutal portrayal of African life less than 10 years ago. The public relations effort for the movie pointed out that, since the Kimberley Process was initiated (in 2000), only 0.02% of the diamonds sold can be labelled "conflict" stones. Consumers are aware of the provenance of their gems, and avoid buying diamonds that fund illegal activities.

Deputy Grand Chief Alvin Fiddler of the NISHNAWBE ASKI NATION (NAN) based in Thunder Bay, Ont., has waded into the fray. His opinion, posted Dec. 6, 2006, on Rapaport News (www.Diamonds.net), states, "Unfortunately, many Canadian diamonds are anything but conflict-free; on-going aboriginal rights and environmental concerns should make consumers think twice before purchasing a Canadian diamond, too.

"The hunt for these rare gems from the heart of the Earth has meant only conflict and strife for us. De Beers plans to develop massive open pit diamonds mining projects in our traditional territory [referring to the Victor project], but it is not honouring our treaty rights or working with us to win our consent for the projects," Fiddler complained.

Is that correct? Are Canadian stones "conflict" diamonds?

Not according to Chief Mike Carpenter of the ATTAWAPISKAT, the nation working closely with DE BEERS CANADA on the development of the Victor project. He responded to Fiddler with a letter dated Dec. 11, 2006, writing that his people have negotiated a landmark impact benefit agreement with the company. "With strong legal representation and the assertion of our rights, Attawapiskat fought strongly with De Beers and both levels of government using our rights to our territory for what we obtained in our IBA: education and training, contracting and employment preferences, environmental monitoring and guarantees, and financial benefits."

Neither is De Beers Canada silent about Fiddler's remarks. The company issued a media release on Dec. 21 that stated: "Our position is that the Aboriginal people of Canada, and particularly those within the NAN territory, require immediate economic development opportunities. Resource development can achieve this, as the Attawapiskat First Nation have done with the Victor project."

I doubt that the struggle for Aboriginal peoples' right to benefit from resource development is over. But I firmly believe Canadians are leading the way toward ensuring that First Nations will benefit. There are many examples in this country of how to co-operate with First Nations for the betterment of both the Aboriginal community and the mineral industry.

CANALASKA URANIUM has struck a deal with the BLACK LAKE DENESULINE FIRST NATION to explore the band's territory for uranium, on the northern rim of the Athabasca Basin. The agreement gives CanAlaska a 49% interest in a joint venture should any resources be discovered in return for a minimum expenditure of $2.0 million over four years. The band will also receive CanAlaska shares and cash payments. The agreement also allows for the participation of third parties should a minable deposit be outlined.

The MINING ASSOCIATION OF CANADA (MAC) has drafted a "Framework on Mining and Aboriginal Peoples" requiring its members to respect Aboriginal rights and interests, undertake discussions with them early in the creation of any project, and to negotiate participation agreements (see CMJ, January 2007 issue).

Both CanAlaska's efforts on an individual scale and MAC's commitment on behalf of its 25 producing members and 50 associate members are outstanding examples of co-operation that will extend the wealth of Canada's mineral resources to all stakeholders.

Canadian Diamonds History

(found at Diamondsource) There was the gold rush in the late-19th century in the Yukon when tens of thousands of stampeders headed north to Dawson City to make their fortunes. The rush is now for diamonds, first in the Northwest Territories and now in the new territory of Nunavut. This new territory is the result of Canada's largest land claim settlement, created in 1999 to give the Inuit (Eskimo), representing 85% of its population, a greater voice in Canadian government. Occupying an area of 772,000 sq mi, or one-fifth of Canada's landmass, it comprises the central and eastern parts of the former Northwest Territories, including Baffin and Ellesmere islands.

For many years, the thought of finding diamonds in Canada was little more than a prospector's dream. But that dream became a reality following the discovery of several world-class diamond-bearing deposits in Canada's north. While only starting in 1991, Canada now ranks in the top three diamond producers in the world in terms of value.

Diamond exploration began in Canada as early as the 1960s but major kimberlite discoveries were not made until the 1980s. In 1991, the first economic diamond deposit was discovered in the Lac de Gras area of the Northwest Territories. Canada's diamond industry has now become a $1.7 billion industry with all indicators pointing to potential for future growth. Canadian diamond production in 2002 was almost 5 million carats and in 2003 was 11.2 million carats.

Mines

Canada became a diamond producer in October 1998 when the Ekati diamond mine opened about 300 kilometers northeast of Yellowknife. By April 1999, the mine had produced one million carats. Diamond exploration and exploitation are very expensive projects. The total investment for Ekati is estimated at $700 million U.S. including all project costs from the exploration to the start of the production. But the Ekati mine is expected to produce 3.5 to 4.5 million carats of rough diamonds per year, which are about 4% of the current global production by weight and 6% by value.

canada mine At the Ekati Mine, mining kimberlite, ore and treating material activities are performed. Five separate kimberlite pipes (Panda, Koala, Fox, Sable and Misery) will be open pit mined and later, because of the higher value of their ore; underground mining will be done at Panda and Koala.

Diavik, Canada's second diamond mine, began production in January 2003. With its projected 20-year life, the average diamond production from this mine is expected to peak at six to eight million carats a year which is about 5% of the world's total supply. Ekati's average production over its projected 20-year life is expected to peak at three to five million carats a year, 4% of world production by volume.

A third diamond mine, Jericho-3, should begin production in 2005, in Nunavut. A fourth diamond mine, Snap Lake-4 in the Northwest Territories, should begin production in 2006.

Third-Largest Producer

At the end of 2003, Canada was the world's third-largest producer of diamonds, providing 15% of the world's supply. The top two diamond producers are Botswana and Russia. Canada's quest for diamonds looks like one of the biggest stories in Canada for the next 10 to 20 years and beyond.

Between 1998 and 2002, 13.8 million carats have been mined and the diamonds are worth $2.8 billion. This is roughly a 1.5-kilogram bag of diamonds each day for five years, with each bag worth $1.5 million.

The supply of Canadian diamonds is not expected to diminish any time soon. Ekati, Diavik, Jericho and Snap Lake are expected to keep producing the best diamonds in the world for the next 18 years. By then, of course, judging by the prospecting, claims and permit action in the Canadian North, more diamond mines will have come on line, probably lots more