Mining for diamonds.

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 Come 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 diamond are heavy, gravity processes are used to separate them from the ore, eliminating the need for the toxic chemicals 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.