With two mines in production and at least another two in the wings, Canada is set to become the world's third-biggest diamond producer by value, trailing only Russia and Botswana, a Statistics Canada report says.
Canada's rise to prominence on the diamond scene has been notable not only for its speed -- diamonds were first discovered in here in 1991 -- but also for the quality of Canadian gems, the report says. It was commissioned because, the agency said, diamonds are adding new lustre to the economy and the impact will be felt for years as mines reach peak production.
"Not only is Canada rich in diamonds, it is rich in high-quality diamonds," says the report, released yesterday. "From 1998 to 2002, roughly 13.8 million carats have been mined, collectively worth $2.8-billion. This is roughly a 1.5-kilogram bag of ice each day for five years, with each bag worth $1.5-million."
Canada currently has two mines, both northeast of Yellowknife in the Northwest Territories -- Ekati, in production since 1998, and Diavik, which opened last year.
The industry invested $1.8-billion in capital spending in the Northwest Territories between 1998 and 2002, the report says, accounting for 37 per cent of all capital spending during the period.
Between 1998 and 2001, the number of employees directly involved in diamond mining surged to more than 700 from just over 90. Recent employment figures put that total now at about 2,200. Many jobs are going to northern residents, including aboriginals.
Canadian rough diamonds -- assessed for size, clarity and colour -- are commanding high prices, the report says. In 2001, when more than 3.3 million carats of diamonds were mined in Canada, the average price per carat for a Canadian-mined diamond was $228, behind the value of diamonds mined in Namibia, where the average price per carat surpassed $400, and in Angola, where the price was slightly higher than Canadian-mined diamonds.
Government revenue is getting a boost from the young industry.
Ekati, Diavik and Snap Lake, a third NWT mine expected to open in 2006, will generate royalties of $1.6-billion over their lives, the report says, as well as federal business taxes of $2.6-billion and territorial business taxes of $1.3-billion.
The profits generated by the mines have become a sticking point between the federal and NWT governments, with the Territories saying it should get a bigger share.
It has also pushed hard to develop a domestic cutting and polishing industry, arguing that most of a diamond's value comes after it is cut and polished.
There also is disagreement over how a Canadian diamond should be defined. Some, including the NWT government, say a gem should be mined, cut and polished here to be called Canadian.
Under the Competition Act, a diamond mined in Canada may be cut and polished elsewhere and still be considered Canadian.
World production
2001/$million (U.S.)
Botswana: 2,160
Russia: 1,665
South Africa: 958
Angola: 730
Congo (Dem. Rep.): 526
Canada: 450
Namibia: 417
Australia: 278
Guinea: 80
Sierra Leone: 69
Central African Rep.: 65
Venezuela: 40
Brazil: 26
Other: 104
TOTAL: 7,568
SOURCE: NYT GOVERNMENT
Wendy Stueck