Canada's Young and Flourishing Diamond Mining Industry

The Peregrine Diamonds Ltd. diamond exploration and development company announced this week that another new diamond deposit was discovered at Chidliak, Nunavut in northern Canada. A 220.9 sample from the kimberlite formation produced 664 diamonds, making the site a viable spot for a profitable diamond mine.

This is more good news for the Canadian diamond mining industry, which is still green behind the ears, as diamonds were first unearthed in Canada just some 20 years ago. Since then, however, the North American nation has proven to be one of the most promising territories in the world for diamond exploration and mining.

For hundreds of years the heart of the diamond mining industry was located in Africa, especially in South Africa, Botswana and Namibia, as well as in Russia and Australia, and the diamond mining industry was within the tight clutches of De Beers diamond company, which mined three-quarters of all the world's diamonds. Since 2003, Canada is the third highest diamond producing country (by value) in the world after Russia and Botswana.

Diamond exploration started in Canada in the 1960s, although for decades bore no results. Then, in 1991, thanks largely to the efforts of one determined – and notoriously absent minded – diamond prospector named Chuck Fipke, the first economic diamond deposit was discovered in the Canadian Arctic, at Lac de Gras, launching the highest staking diamond rush in North America. Soon several more diamond rich kimberlite pipes were unearthed around northern Canada.

Now a multimillionaire diamond tycoon, Fipke got his start as a geologist who made it his life goal to find diamonds in Canada. His Ekati diamond mine (shown in picture) first opened in 1998, to great success, and within a year the mine had generated a whopping one million carats of diamonds. Its current production accounts for nearly 3% of world diamond production.

The second diamond mine in Canada, Diavik, opened in 2003, and it generates roughly 8 million carats per year – roughly 6% of the world's total diamond supply by volume!

In the past fews years diamond exploration in Canada is as determined as ever, and a few more productive diamond mines have opened across northern Canada, including at Snap Lake, not far from the Ekati and Diavik mines. Owned completely by De Beers Canada, the Snap Lake diamond mine is expected to yield some 1.5 million carats per year. The Victor open-pit mine in Ontario (the province's first diamond mine) just came into production in 2008, and its diamonds are of the highest value in the world (about $440 per carat).

Additional diamond mining projects are in advanced stages in the Northwest Territories – Gahcho Kue, Foxtrot in Quebec, and Star and Fort-a-la-Corne in Saskatchewan. These mines harbor highly promising kimberlite deposits and ensure a thriving future for the regions where they are located.

With the increasing volume of diamonds mined in Canada, the nation's diamond processing industry remains small. There are six plants cutting and polishing diamonds as of 2008 across Canada, employing roughly 150 workers in total. Far more workers are employed in diamond mining, an industry which has provided over 2500 jobs in mine operations, contracting, maintenance, transport, etc.

Canada was a key player in drafting the UN's Kimberley Process Certification Scheme, aimed at eradicating blood diamonds from the market (diamonds sold to finance brutal rebel warfar, especially in Africa), and continues to be a leader in implementing the process's requirements. All of Canada's diamonds are conflict free.