Feds to study diamond sector

Indian and Northern Affairs Canada (INAC), a department of the Ministry of Indian Affairs and Northern Development, is about to undertake what it hopes will be an authoritative study of Canada’s burgeoning new diamond industry, building on information gleaned from a “National Round Table” organized by Natural Resources Canada in May 2003.

To help with the study, INAC is seeking participation from all major stakeholders in the industry, and proposes that a working group consisting of representatives from industry and government be established to determine the study’s scope and goals.

In late 1991, Dia Met Minerals’ diamond find in the Lac de Gras area led to a staking rush in the Northwest Territories and what is now known as Nunavut.

Since then, at a combined capital cost of C$2.1 billion, the country’s first two diamond mines, Ekati and Diavik, have entered production and are slated to yield about 12 million carats annually. The estimated value of this production is C$1.3 billion. Ekati and Diavik together employ 1,100 people, of whom 60% are northerners and 30% are aboriginal. In addition, annual purchasing by the two mines will be about C$450 million, with the bulk being made in the region.

Two more mines could come on-stream before 2006: Tahera’s Jericho diamond project in Nunavut filed its final environmental impact statement with the Nunavut Impact Review Board in January 2003, and De Beers Canada is awaiting approval from the Mackenzie Valley Environmental Impact Review Board for its Snap Lake diamond project in the Northwest Territories. By 2006, Snap Lake could be producing 1.7 million carats per year with an estimated value of C$250 million, and Jericho could be producing 375,000 carats per year with a value of about C$25 million.

Canada now boasts significant diamond finds in the Northwest Territories, Nunavut, the Wawa area of Ontario, the James Bay region of Ontario and Quebec, the Otish Mountains and Ungava regions of Quebec, and Fort la Corne in Saskatchewan. More than 30% of the world’s diamond-exploration budget is now being spent in Canada.

The diamond industry is the largest private employer in Canada’s Far North, and, by the latter half of this decade, Canada will likely be the world’s third-largest diamond producer, after Botswana and Russia.