The Northern Sparkle

Ekati mine
Ekati mine

Canadian diamonds are the most sought after for their guaranteed “conflict-free” origins. The rest of the world continues to look up to Canada as a leader when it comes to mining.

Canada may not have the history when it comes to diamonds when compared to other nations, but it has become one of the leading producers of diamond in the world in a very short span of time, since the first discovery of diamonds in the 90s. It is also a major producer of potash, aluminum, cobalt, diamonds, nickel, platinum group metals, titanium, tungsten, uranium and zinc.&&The country is also one of the prime investment destinations and is said to be the second best in G20 to do business, according to Forbes. The international lending agency, IMF, said in January that it now projects Canada’s economy growth as 2.3 per cent this year, up from an estimate of 2.1 per cent in October. Growth for 2019 is forecast at 2.0 per cent, up from an earlier projection for 1.7 per cent.

Diamond Mining
In 1991, two geologists, Chuck Fipke and Stewart Blusson, found evidence of diamond-bearing Kimberlite pipes about 200 miles north of Yellowknife, Northwest Territories. One of these pipes was developed by BHP Billiton into the EKATI Diamond Mine, which produced Canada’s first commercial diamonds in 1998 and that is how it all started.

Today, Canada is the fifth-largest diamond producer in the world, according to the Mining Association of Canada. Canadian diamonds are well-known for their guaranteed “conflict-free” origins. Along with the other diamond producing countries, Canada follows the Kimberley Process and has taken a strong leadership role in the diamond industry ensuring that their diamonds are produced with strict adherence to ethical and environmental guidelines and fair labour practices.

Mining Challenges
Most of Canada’s diamond projects are concentrated in Northwest Territories. However, harsh geography and winter temperatures often pose a challenge to the miners. Besides, finding properly trained people to meet the demand for skilled and semi-skilled workers is also another difficulty faced by the mining and exploration companies in this region.

The Canadian Diamond Code of Conduct - The Code
The Code stems from the Competition Bureau’s Enforcement Policy on the Marketing of Canadian Diamonds. It ensures “Canadian” diamonds complies with the provisions of the Competition Act. It takes into account the Enforcement Guidelines relating to “Product of Canada” and “Made in Canada” Claims published by the Bureau.

This Code establishes a minimum standard required to validate a Canadian Diamond claim based on a paper trail and a chain of warranties, which was found to be the most appropriate system to validate claims on the origin of Canadian diamonds. The Code is endorsed by the Competition Bureau of Canada and the World Jewellery Confederation (CIBJO).

Gahcho Kué Mine
The Gahcho Kué Mine is one of the largest diamond mines in the world. The mine is a joint venture between De Beers Canada Inc. (51 per cent) and Mountain Province Diamonds Inc.(49 per cent).

Located at Kennady Lake, approximately 280 km northeast of Yellowknife and 80 km southeast of De Beers’ Snap Lake Mine in the Northwest Territories, the mine began the ramp up of production in early August 2016 and was officially opened on 20th September 2016. The mine commenced commercial production in March 2017.

As per the Anglo American plc Production Report for the fourth quarter that ended 31 December 2017, De Beers production increased by 5 per cent supported by stronger trading conditions, with Gahcho Kué operating at nameplate capacity since Q2 2017.

Victor Mine
Victor Mine in northern Ontario is De Beers’ second mine in Canada. The openpit mine commenced production in July 2008. The company in November 2017 announced that it will complete mining and processing activities in Q1 2019, and then move into the formal closure phase.

According to a company statement released last year, the mine was forecast to produce six million carats during its mine life and has already exceeded these projections, producing approximately seven million carats till date, and it will continue to operate at full production throughout its remaining life.

The Victor mine team has been recognized for its exemplary performance throughout its operation, with the mine being named International Mine of the Year in 2009. It is also the recipient of the John T. Ryan National Award for the safest mine in Canada in 2015 and 2016.

Snap Lake Mine
Snap Lake Mine, De Beers’ first mine outside of Africa, is a completely underground diamond mine. The mine commenced commercial production on January 16, 2008 and the Official Mine Opening took place on July 25, 2008. It was placed into care and maintenance on 4th December 2015. According to reports, the mine produced 1.2 million carats of diamonds in 2014.

Renard Mine

The Renard mine is Québec’s first diamond producing mine and Canada’s sixth. Located in the James Bay region in north central Québec, the mine is 100 per cent owned by Stornoway. Construction work on the project began in July 2014 and the company announced commercial production in January 2017. The open pit and underground mine is forecast to produce an average of 1.8 million carats annually over its 14-year mine life.

Recently, the company announced that in 2018, it will take up a drill program of 100 targets on the Renard Property aimed at new Kimberlite discovery; 5,000 meters of delineation drilling on Renard aimed at the conversion of high grade mineral resources and their acceleration in the Renard mine plan; and grassroots sampling and drilling on new claim acquisitions in both eastern and western Canada.

According to the production and sales results at the Renard Diamond Mine for the quarter and year ending December 31, 2017, fourth Quarter diamond production of 398,267 carats was produced from the processing of 518,817 tonnes of ore with an attributable grade of 77 carats per hundred tonnes (“cpht”), compared to a plan of 415,940 carats from 540,000 tonnes at 77 cpht (96 per cent, 96 per cent and 100 per cent respectively).

Diavik Mine
The Diavik Diamond Mine (Diavik) is an unincorporated joint venture between Diavik Diamond Mines (2012) Inc. (a Rio Tinto company) and Dominion Diamond Diavik Limited Partnership. Dominion owns 40 per cent of the mine while Rio Tinto holding the remaining 60 per cent and running the project operations.

In May 2016, the company announced a major milestone of producing 100 million carats of rough diamonds since the mine commenced production in 2003. The mine produces predominantly gem-quality diamonds destined for high end jewellery in all major consumer markets around the world.

In 2014, the development of a fourth pipe at Diavik, known as A21, was approved and production from A21 is expected to commence this year. In May 2016, the Rio Tinto showcased one of the world’s largest gem quality rough diamonds to customers in New York and at Tel Aviv’s International Diamond Week. The 187.7-carat rough diamond discovered at the mine is known as the Diavik Foxfire.

Jewellery Industry
The Canadian jewellery industry is mainly comprised of companies involved in manufacturing, engraving, chasing or etching jewellery, novelties or precious metal flatware, and other plated ware; stamping coins; cutting, slabbing, tumbling, carving, engraving, polishing or faceting precious or semiprecious stones and gems; re-cutting, re-polishing and setting gem stones; or drilling, sawing, and peeling cultured and costume pearls.

The jewellery industry in Canada includes products from costume jewellery (including imitation stones and pearls), flatware, silver or silver plated jewellery, halloware (silver, nickel silver, pewter, stainless steel, and plated), industrial diamonds (cut and polished), jewellery and silverware (metal embossed), jewellery engraving, jewellery polishing, jewellery (made of precious metal or precious or semiprecious stones), medals (precious or semiprecious metal), coins, pearls, pewter ware, and precious stones.

As per report published in June 2017 by Euromonitor International, producers of fine jewellery brands in Canada continue to invest and expand across Canada, bringing more competition.
According to experts, the retail market in Canada is in a state of creative reinvention. In late 2016, David Yurman introduced its high jewellery collection at Holt Renfrew in Vancouver, featuring by-appointment-only pieces. The brand plans to open more outlets in luxury department stores in the next few years. The UK-based jewellery brand Links of London has opened four stores in Canada and is phasing out its sales in Holt Renfrew as it opens more standalone stores across the country.

Fragmented Market
The jewellery market in Canada is very fragmented without a single dominant player. According to Euromonitor report, in 2016, Zale Canada Inc had a relatively strong position with a 4 per cent value share in fine jewellery, making up 3 per cent of jewellery overall. After the combination of Signet and Zale, Zale Canada Inc now include Peoples jewellers and Mappins jewellers, both of which target the middle class with affordable prices and a wide selection of products. Peoples positions itself as Canada’s number one diamond store and was Canada’s largest jewellery retailer with a 3 per cent value share in fine jewellery in 2016.

Jewellery is expected to see robust growth over the forecast period, posting a value CAGR of 3 per cent at constant 2017 prices to reach CAD9.3 billion over the forecast period, stated Euromonitor International report.

Rise in disposable incomes and increased demand for branded jewellery is likely to boost industry growth. International brands will continue to expand their geographical reach in Canada, making the jewellery marketplace more vibrant while raising consumer awareness of quality jewellery products.

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