Diamond Rush: Birth of a Diamond Mine

<< Back to Robb Report, November 2003
  • Carol Besler

At a development cost of more than $941 million, the Diavik diamond mine stands as a unique testament to the extremes—and expense—to which producers will go to dig diamonds out of the ground. The mine site—stretched over a tiny island in Lac de Gras, 186 miles north of Yellowknife—seems to blend inconspicuously into the Arctic barrens, hunkered down under the ice and snow for most of the year in temperatures that can dip to 40 below zero. When approaching the small landing strip, just to the side of a few boxy, nondescript buildings, it is hard to imagine how developing this desolate site could have run a tab of almost $1 billion. Even the dike—which absorbed about a third of the development budget—seems unremarkable. Rising only slightly above the flat plane of Lac de Gras, it resembles the border of a large, free-form swimming pool. Under the lake, which has been drained since last October, is the prize: the ore body containing the main kimberlite pipe, A154 South.

Most of the Canadian Arctic’s kimberlite pipes are hidden under small lakes. Mining Ekati’s Panda pipe, about 18 miles northwest of Diavik, involved draining a lake with a diameter of about one kilometer. Diavik’s pipes (it will mine four out of 63 discovered on the property) are located at one end of a 37-mile-long lake—impossible to drain, and next-to-impossible to dam. There is only one other dike in the world like the one that holds back the waters of Lac de Gras from A154. It was built across the mouth of a fjord off the coast of Newfoundland to allow for the construction of the Hibernia oil-drilling platform. That dike was meant to last a year or two, until the platform was constructed; Diavik’s has to hold for the next 20—the expected life span of the mine.

The dike is a marvel of modern engineering, incorporating 6 million metric tons of rock in three different sizes and an array of technical thermosyphons (which preserve the integrity of the permafrost), inclinometers (which measure deformities in the dike), thermistors (which measure temperature), and piezometers (which measure pressure). Over the course of the three-year construction, Diavik transported more than 8,200 truckloads of fuel, supplies, and construction materials to the site, which is so remote it can be accessed only by air or ice road (over frozen lakes and ponds) two months of the year. The payoff? Diavik will produce high-quality diamonds and lots of them: Over the course of its life span, Diavik will produce an estimated 106.7 million carats, with production expected to peak at more than 6 million carats per year, at an average of $80 per carat, for a total annual production of $560 million. Such productivity will represent 5 percent of the world’s supply of rough diamonds.

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