Canadian Diamond Industry

How Did Canada Become One of the World's Top Diamond Producers?

Rough diamonds from the EKATI Diamond Mine in Canada.
Rough diamonds from BHP Billiton EKATI Diamond Mine in Canada. (Photo by Coal Photography/Alexander Legaree / Getty Images)

Before 1990, Canada was not among the world’s top diamond producers, but by the mid-2000s it ranked third, behind Botswana and Russia. How did Canada become such a powerhouse in diamond production?

Canada’s Diamond-Producing Region

Canada’s diamond mines are concentrated in the region of Canada known as the Canadian Shield. The three million square miles of the Canadian Shield covers about half of Canada and hosts the world’s largest amount of exposed Precambrian rock (in other words, really, really old rock).

These old rocks make the Canadian Shield one of the world’s most mineral-rich areas, with large reserves of gold, nickel, silver, uranium, iron, and copper.

Before 1991, however, geologists did not know that vast amounts of diamonds were also in those rocks.

History of Canada’s Diamond Industry

In 1991, two geologists, Charles Fipke and Stewart Blusson, discovered Kimberlite pipes in Canada. Kimberlite pipes are underground rock columns formed by volcanic eruptions, and they are a leading source of diamonds and other gemstones.

Fipke and Blusson’s find launched a major diamond rush – one of North America’s most intense mineral rushes – and diamond production in Canada exploded.

In 1998, the Ekati mine, located in the Northwest Territories, produced Canada’s first commercial diamonds. Five years later, the large Diavik mine opened nearby.

By 2006, less than a decade after the Ekati mine started production, Canada was ranked the third largest producer of diamonds by value. At that time, three major mines – Ekati, Diavik, and Jericho – were producing more than 13 million carats of jewelry diamonds per year.

During the diamond-rush period, northern Canada greatly benefitted from the billions of dollars brought in by mining activity. Then the region experienced a recession following the global economic downturn that started in 2008, but in recent years the mining industry has recovered.

How Diamonds Are Produced

Contrary to common belief, not all diamonds are formed from coal. A high-pressure, high-heat environment with carbon-rich rocks is needed to form diamonds, but coal reserves are not the only areas with these conditions.

Hundreds of miles below Earth’s surface, where temperatures are above 1832 degrees Fahrenheit (1000 degrees Celsius), pressure and heat conditions are ideal for diamond formation. However, coal rarely travels past 1.86 miles (3 km) below the surface, so diamonds that come from the Earth’s mantle were formed by an unknown type of carbon that has been trapped inside Earth since its formation.

It is believed that most diamonds were formed in the mantle by this process and came to the surface during deep-source volcanic eruptions – when pieces of the mantle broke off and shot to the surface. This type of eruption is rare, and there hasn’t been one since scientists were able to recognize them.  

Diamonds can also be formed in subduction zones and asteroid/meteor impact sites on Earth or in space. For instance, the major Canadian mine, Victor, is situated in the Sudbury Basin, the world’s second-largest impact crater.

Why Canadian Diamonds Are Favored

So-called “blood diamonds” or “conflict diamonds” are produced in many African countries, especially Zimbabwe and Central African Republic. Many people refuse to buy these diamonds because they come from areas where rebels steal diamond revenue and use the wealth to fund wars.

Canadian diamonds are a conflict-free alternative to these blood diamonds. The Kimberley Process, made up of 81 countries including Canada, was set up in 2000 to control the production of blood diamonds. All member countries must meet strict requirements for conflict-free diamonds. These include a ban on trading with non-member countries to avoid introducing conflict diamonds into the legitimate trade. Currently, 99.8% of the world’s rough diamonds come from Kimberley Process members.

The Canada Mark is another way Canada ensures that its diamonds are produced sustainably and responsibly, with respect for the environment and the mineworkers. All Canada Mark diamonds must be put through a series of checkpoints to certify their authenticity, quality, and compliance with environmental laws and regulations. Once this has been proven, each diamond is inscribed with both a serial number and a Canada Mark logo.

Obstacles to Canadian Diamond Success

Canada’s diamond mining region in Northwest Territories and Nunavut is remote and icy, with winter temperatures hitting

-40 degrees Fahrenheit (-40 degrees Celsius). There is a temporary “ice road” leading to the mines, but it is only usable for about two months per year. During the rest of the year, shipments must be flown in and out of the mining area.

Mines are equipped with housing facilities because they are so far from towns and cities that mineworkers must live on-site. These housing facilities take away money and space from the mines.

The cost of labor in Canada is higher than the cost of similar mining labor in Africa and elsewhere. Higher wages, combined with the Kimberley Process and Canada Mark agreements, ensure a high quality of life for employees. But Canadian mining companies lose money this way, making it harder for them to compete with mining operations in countries with lower wages.

Canada’s principal diamond mines are open-pit mines. Diamond ore is on the surface and does not need to be dug up. Reserves at these open-pit mines are rapidly depleting and soon Canada will need to turn to traditional underground mining. This costs 50% more per ton, and making the switch will likely take Canada off the map as one of the world’s top diamond producers.