Canada uncovers its diamonds


Wealth: The first mine is open. Others are in line. Almost overnight, the nation has become one of the major diamond producers in the world.

March 21, 2000|By Colin Nickerson | Colin Nickerson,BOSTON GLOBE

EKATI DIAMOND MINE, Northwest Territories -- When the mercury drops to minus-40 degrees and below, steel bulldozer blades scraping rock sometimes shatter like a champagne bottle flung against a ship's bow.

Great tusks of frozen breath dangle from the beards and nostrils of miners in the immense open pit, where the blink of an eye can bring blindness as eyelashes freeze instantly to the lower lid, as if spot-welded.

But the digging goes on around the clock and in all weather at North America's only diamond mine, barely a year old but already producing more than $1.3 million a day in precious gems.

Mammoth earthmoving machines, including trucks with 218 tons of capacity, whose drivers perch three stories above the iced tundra, rumble beneath the eerie flare of the aurora borealis -- the northern lights -- while the flat crack of high explosives reverberates across a terrain so bleak and forbidding that the Indians call it the Barren Grounds.

"It takes 10,000 tons of rock to yield a ton of kimberlite ore," says Serge Pelletier, a Quebec-born engineer and operations overseer at the Ekati mine. "And that ton of kimberlite will yield just a single carat, on average."

That's a lot of rubble to sift, scrub and scan. But the Ekati, unlike most diamond mines, produces almost entirely diamonds of gem quality, not industrial diamonds, and nearly all will wind up adorning women in North America, Europe and Japan.

"It's certainly among the richest diamond mines in the world," says Graham Nicholls, spokesman for BHP Diamonds Inc., operator of the mine. "Perhaps the richest."

Most diamonds come from Africa, and for 100 years the industry has been inseparable from De Beers Consolidated Mines Ltd., which produces 50 percent of the world's diamonds from its mines in southern Africa. The firm also controls 70 percent of the international supply of the raw gems through its sales cartel in Belgium.

Canada's emergence as a major producer is shaking up the closed, cozy world of big diamonds. In 10 years, some analysts reckon, this nation might be the source of 12 percent of the world's supply.

Only a few years ago Canada produced as many diamonds as it does coconuts: none. Although a few geologists insisted that the country's frigid outback must contain deposits, De Beers and other major diamond mining companies had for years scoured the hinterland above 60 degrees latitude without hitting pay dirt. The quest, always a long shot, came to seem futile, even a little loopy.

"Talking about finding diamonds in Canada was like talking about going to Mars," says Charles E. Fipke, a geologist-prospector from British Columbia whose obsessive pursuit of northern diamonds mostly drew hoots of derision in the rowdy taverns of Yellowknife, the territorial capital. "People thought you were crazy, or pulling some kind of scam."

Long after the diamond heavyweights wrote off the north as a bad bet, Fipke kept tracking elusive glacial trails across the barrens, riding bush choppers and rubber rafts to the far corners of this realm of caribou, ravenous wolves and croaking ravens.

Then, in November 1991, he dug up a micro-diamond near Point Lake, Northwest Territories. The find triggered the biggest prospecting stampede in Canada since the Klondike Gold Rush of the 1890s, as more than 72,000 square miles -- a territory the size of New England -- were staked by mining outfits in a matter of months.

Dozens of possibly rich kimberlite pipes were located, most covered by lakes.

Fipke's exploratory company, Dia Met Mineral Ltd., joined with BHP Diamonds, a subsidiary of Australian mining giant Broken Hill Proprietary Co., to develop the Ekati site, 120 miles south of the Arctic Circle and 110 miles from the nearest human habitation, the Dogrib Dene Indian hamlet of Wekweti.

The Ekati is the only diamond mine up and running on this continent. Its huge indoor processing plant, housing complex for workers (flown to the site for two-week, 12-hour-a-day shifts) and machinery sheds are the largest construction north of Canada's tree line.

Even more impressively, the Ekati has catapulted this country into the major leagues of diamond mining, with more than $400 million in annual production, tying Australia as the fifth-largest producer of diamonds by value, after Botswana, Russia, South Africa and Angola.

"From nowhere, the [territory] is already producing 6 percent of the world's diamonds," says Martin Irving, director of diamond projects for the territorial government. "That's from a single hole in the ground. It's a pretty exciting thing for Canada, and for the diamond industry."

As BHP Diamonds scoops its fabulous bounty from the kimberlite at a rate of more than 225,000 carats a month, competing diamond interests are stamping impatiently in the wings. Diavik Diamond Mines Inc. is ready to start a $1 billion excavation on an island in Lac de Gras, just across the ice from the Ekati lode.

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