Commercial Operations at Gahcho Kue Highlights Canada as Global ProducerJune 29, 17
Mountain Province Diamonds' report this week of the sale of 222,000 carats of rough stones for $21.1 million at $95 per carat at its fifth diamond sale of goods from Gahcho Kué has served to put the spotlight on the country's major role as a diamond producer.
The manner in which Mountain Province secures certain diamonds for sale in competition with its partner, De Beers Canada, which owns 51 percent of the operation, is also of interest. The firms bid for the diamonds they are particularly interested in selling. Mountain Province's sales figures were increased due to the inclusion of a selection of the fancies and specials won by the company otherwise scheduled for inclusion in the sixth sale, which will occur in the second half of July. Excluding these high value diamonds, the average value realized per carat was $75.
The fifth sale represented the company's strongest sale performance to date, the mining company said. "The financial result was matched by several strong performance measures, including the number of buyers attending, the number of attendees placing bids and the average number of bids per lot." Reid Mackie, Vice President Diamond Marketing, said: "The June tender sale was our best attended to date and produced a record number of bids. Repeat customers won 75 percent of lots, indicating that the rough market's understanding of our diamonds' performance at manufacturing is positive and well on track." The company declared the commencement of commercial production on March 1.
As far as Canada is concerned, it has taken the country little more than 15 years to become one of the world's main diamond producers. The main diamond-producing countries, notably South Africa, Russia and Botswana, have been in the game for much longer. In South Africa's case, more than a century and in the case of the other two states, much more than half a century.
In Canada's case, areas rich in diamonds were found with the November 1991 discovery of diamonds in the Northwest Territories by Chuck Fipke and Stu Blusson in what eventually became the Diavik mine. Output at the mine is expected to be about 7.4 million carats this year.
Another relatively new mining operation is Stornoway’s Renard mine in Quebec which has been a long time in the making. The firm in May announced the production of one million carats of diamonds and polished diamonds from the mine are already being offered for sale in Birks' department store in Montreal. Renard is Quebec’s first producing diamond mine and Canada’s sixth. Average annual diamond production is forecast at 1.8 million carats per annum over the first 10 years of mining.
One of the world's major diversified miners, Rio Tinto, is also involved in the Canadian diamond mining scene – owning 60 percent of the Diavik mine. And new Rio Tinto head, Jean-Sebastien Jacques, last year confirmed that diamonds are a “priority area” for the firm, saying, “I would love to have more diamonds, to be very explicit.” And the company has further put its money where its mouth is with an announcement this week by signing a three-year, $18.5-million option on Shore Gold’s Star-Orion South diamond project in northern Saskatchewan.
Meanwhile, De Beers is working to extend the life of its Victor mine in Ontario, but work on a potential expansion can't move forward until it reaches an agreement with the Attawapiskat First Nation and other communities in the area.
Canada owes its number three ranking to just one region of the Northwest Territories, Lac de Gras, which is the location of three large diamond-producing mines, Ekati, Diavik and Snap Lake.
Among the country's other mining firms are Kennady Diamonds Inc. which controls 100 percent of the Kennady North diamond project located in the Northwest Territories. Kennady North is immediately to the north and west of the Gahcho Kué Diamond Mine.
Meanwhile, Arctic Star Exploration has announced plans to explore its 54,000-hectare T-Rex property in Lac de Gras. Previous exploration has found over a dozen kimberlites, most of them diamondiferous, the company says.
And there are other smaller firms aiming to develop Canada's diamond industry. Meanwhile, the country has placed a great deal of emphasis on its diamonds not having any association with conflict diamonds from Africa. Indeed, Canada is one of the main supporters of the Kimberly Process.
In addition, all Canadian diamond mines are overseen by the Canada Mining Regulations for the Northwest Territories. This program ensures the preservation of surrounding land and aquatic habitats.
With diamond mines depleting generally, and particularly at larger operations, the Canada brand appears to be strongly placed to continue to consolidate its position as the world's third-largest diamond producer.