RE: Scout Dyke has not been drilled32 Saskatchewan Business Magazine May 2001
Will diamond mining be a new engine of prosperity for
Saskatchewan in the 21st century?
The basis of this optimism is the discovery of kimberlites,
rare, carrot-shaped rock formations that sometimes contain diamonds.
About one in 10 kimberlite “pipes” has diamonds, and
one in 100 is considered to be economically viable for mining.
Saskatchewan’s first kimberlite was found at Sturgeon Lake
in 1988. Since then more than 50 kimberlites have been found
in the province. It is likely just a matter of time before one of
the deposits yields significant numbers of gem-grade stones.
The discovery at Sturgeon Lake, following several decades
of prospecting in Canada by the diamond giant DeBeers,
sparked an intense rush resulting in the well publicized
development of diamond mines in the
Northwest Territories.
Saskatchewan, along with the other
Prairie provinces, has a large number of
areas containing minerals associated
with kimberlites. So far, hundreds of
promising sites have been identified.
Usually covered with heavy overburden,
kimberlites are not easy to find.
They typically occur in clusters of six to
40, with each cluster involving an area of
some 40 km in diameter. Because they
emit a distinctive magnetic signature,
they can sometimes be identified using a
magnetic survey, either from the air or
on the ground.
The mining company Uranerz, for
example, discovered the kimberlites at
Fort a la Corne near Prince Albert by
looking through archived magnetic surveys.
This site, now being assessed by a
consortium consisting of DeBeers, Cameco and Kensington, is
currently one of the most promising in the province. Gem
quality stones have been found and results from an analysis of
ore from a major drill program are impressive.
Several factors determine the economic feasibility of a
potential diamond mine. The first is the presence of some good
quality diamonds, but equally significant is the ore grade, i.e.
the number of diamonds per unit weight of kimberlite.
Diamonds are a little like the proverbial needle in a haystack:
kimberlite is considered high grade if one carat of diamond can
be found in one tonne of ore.With one carat weighing 0.2 grams,
and a tonne of ore representing one million grams, an ore body
is economic at just one part diamonds per five million parts ore.
Another important factor is mine location. In the N.W.T.,
mining companies incur high exploration and development
costs due to a lack of existing infrastructure, such as roads and
housing. Ore bodies must be of a very high grade to be
profitable.With the Saskatchewan deposits occurring in areas
with existing roads and communities, infrastructure costs will
be significantly lower, meaning it could be profitable to develop
a mine with a lower grade ore.
The kimberlites found in northern Saskatchewan, such as
Shore Gold’s Star kimberlite, are some of the largest in the
world. If the ore is sufficiently rich in these kimberlites, it
could be mined for a long time, creating a substantial new
industry for the province. Unlike many other minerals, diamond
prices tend to remain very stable,
ensuring a strong and reliable market.
The economic benefits to Saskatchewan
from a diamond industry could therefore
be in the range of billions of dollars
of GDP, with hundreds of millions in
resource royalties possible.
While most of the exploration is
occurring in the middle latitudes of the
province, mapping undertaken by the
Geological Survey of Canada indicates
southern Saskatchewan also has an
abundance of promising sites. The presence
of indicator minerals in the Moose
Jaw to Val Marie area has been described
as astounding, though nobody has yet
nailed down their primary source. A significant
potential for further exploration
in this area remains largely untapped.
If and when diamond mining gets
underway, the environmental implications
are considered to be minor. The ore in which diamonds
are found is relatively benign; tailings tend to weather quickly
and eventually disappear into soil. And since diamonds are
heavy, gravity processes are used to separate them from the
ore, eliminating the need for the toxic chemicals sometimes
associated with mining and milling.
In the next few years – perhaps months – we are likely to
know whether Saskatchewan’s potential as a diamond producer
will be realized. If it is, the provincial economy will be significantly
diversified and strengthened, creating a variety of new
spin-off opportunities for Saskatchewan businesses.
Allan Holsten works at the Geological Laboratories of
the Saskatchewan Research Council.
ALLAN HOLSTEN
TECHNOLOGY
Mining for diamonds