De Beers Canada – Sustainable Mining Contributes to Northern Economies and Aboriginal Employment

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

De Beers Canada celebrated two official diamond mine openings back-to-back in July 2008 – the Victor Mine in Ontario and the Snap Lake Mine in the Northwest Territories. However, the path to those production start-ups took a circuitous and difficult journey of almost 50 years. It took vision, faith and dedication to complete the trek.

De Beers, which is acknowledged as the world’s leading diamond company, began in 1888 in South Africa. The company commenced its exploration activities in Canada in the early 1960s with a staff of four. The first geological field season for De Beers in Canada was 1961.

If you move forward almost half a century to 2009 and De Beers Canada’s first full year of production, you can look at the results. From an operational standpoint, Victor turned out 696,000 carats and Snap Lake produced 444,000 carats for a total diamond output of 1,140,000 carats. This led to a revenue of $316.4 million ($243.7 Victor and $72.7 Snap Lake).

The value of diamonds is related to colour, clarity, shape and weight. The quality of diamonds from Victor is exceptional with more than 95% of the stones classified as gem or near-gem quality.

In 2009, De Beers Canada had about 750 employees. The company’s total expenditures in 2009 were $296.7 million with $165.2 million covering operating costs, $80.5 million going to employee wages and benefits, $3.8 million in corporate social investments and $28.5 million paid to governments.

Perhaps the tone of how De Beers operates was best expressed by former chairman Sir Ernest Oppenheimer in 1954. “Our aim is to make profits but to do so in a way that makes a positive and lasting contribution to the communities in which we operate.”

Both Victor and Snap Lake are remote, fly-in sites with limited winter road access. The closest community to Victor is Attawapiskat, 90 kilometres away, and the closest community to Snap Lake is Lutsel K’e, 130 kilometres distant. At Victor in 2009, $121 million was spent on goods and services and $39 million (32%) was provided by Aboriginal businesses. In addition, about 43% of the workforce is Aboriginal. At Snap Lake, $155 million was spent on goods and services with $116 million (74%) provided by northern businesses and $59 million (51%) provided by Aboriginal businesses.

At both Victor and Snap Lake, in agreements with the governments of Ontario and the NWT, respectively, 10% of production based on value, is available for purchase by local agencies. These agreements are nurturing secondary industries adding value to this mineral production.

The head office of De Beers Canada is located in Toronto. In support of major operations, there are also offices in Timmins and Yellowknife. Along with the Victor and Snap Lake Mines, De Beers Canada is a 51% joint venture partner on the Gahcho Kue diamond project in the NWT. The parent company De Beers Societe Anonyme is owned 45% by Anglo American, 40% by Central Holdings Group (Oppenheimer family) and 15% by the government of Botswana.

De Beers SA, and its joint venture partners, carry out business activities in more than 20 countries across five continents employing more than 15,000 people. From its mining operations across Botswana, Namibia, South Africa and Canada, De Beers produces and markets 35% to 40% of the world’s supply of rough diamonds.

De Beers Canada is an active and long serving member of the OMA. The Victor Mine is Ontario’s first diamond mine. This article is the first in a series of profiles of OMA member companies and their contributions to the vitality of Ontario’s society and economy.

  • In Canada, diamond production has taken place for about 12 years.
  • In 1998, the value of Canadian diamond exports was zero.
  • In 2008, the value of Canadian diamond exports was $2.8 billion.
  • There are curently four diamond mines operating in Canada — Diavik, Ekati and Snap Lake in the Northwest Territories and Victor in Ontario.