Davik mines Canada

The rough diamond sorting process is highly automated. After recovery, the diamonds are conveyed into a secured section of the plant where they enter sorting units—large metal canisters containing progressively smaller sieves down to 3 mm. At each sieve level, the diamonds are transferred into separate containers and packaged for shipment.

The Diavik mine is jointly owned by Diavik Diamond Mines Inc. (a wholly owned subsidiary of Rio Tinto plc) and Dominion Diamond Diavik Limited Partnership (a wholly owned subsidiary of Dominion Diamond Corporation). From the mine, the sorted diamonds are flown to a product splitting facility near the Yellowknife airport, where they are divided between the two owners—60% to Rio Tinto and 40% to Dominion Diamonds.

Rio Tinto. This Anglo-Australian mining conglomerate owns a 60% stake in the Diavik mine, which produced 6.7 million carats in fiscal year 2015. It also owns a 100% stake in Australia’s Argyle diamond mine and sells that production in lots separate from Diavik. Rio Tinto markets all of its rough diamonds (figure 23) from a sales office in Antwerp, where it sold 70% of its four million carats from Diavik in 2015 at set prices to 17 “Select Diamantaires” who specialize in manufacturing and distributing Canadian rough and polished diamonds. These clients receive Diavik product via two-year supply contracts (Krawitz, 2015). Like De Beers, Rio Tinto schedules 10 sales, called “core sales,” each year.

 

Figure 23. Rio Tinto markets its Diavik rough diamonds from a sales office in Antwerp.
Photo courtesy of Rio Tinto Diamonds.

Five times per year, Rio Tinto also auctions key assortments from its production to engage with customers outside of its Select Diamantaire base. The company sells fancy-color diamonds and rough diamonds larger than 10.8 ct through two “Specials” tenders each year.

Rio Tinto, under its “Diamonds with a Story” platform, promotes Diavik’s pure and clean Canadian origin and unique provenance. Downstream of the mine, Rio Tinto works in partnership with its Select Diamantaires to provide a tracking system, from the mine to the consumer, for Diavik diamonds (R. Ellison, pers. comm., 2016).

Dominion Diamond Corporation. Dominion Diamonds was originally the Canadian diamond exploration company Aber Resources, which discovered the Diavik site. Dominion owns 40% of the mine; the remainder is held by Rio Tinto, which developed the facility. Aber changed its name to Harry Winston Diamond Company in 2006 after acquiring the venerable jewelry retailer. In 2013, Harry Winston sold its retail division to Swatch, the Swiss-based luxury group, and became Dominion Diamond Company. The same year, the company acquired a majority share in the Ekati mine for $553 million. Dominion markets all of its Ekati and Diavik production separately.

In fiscal year 2015, Dominion sold 3.014 million carats of Diavik’s production for US$351.6 million, averaging about $117 per carat. By the end of 2015, according to Dominion’s annual report, the average per-carat price slipped to $105.

Dominion markets most of its Diavik and Ekati production through its sales offices in Antwerp. About 10% of its production is sold to clients in India ($30.4 million, against total sales of $351.6 million for fiscal year 2015). Initially, the mining companies in northern Canada set aside 10% of their production for local polishing operations (Krawitz, 2014). In 2008 there were six diamond polishing plants in Yellowknife, employing 150 workers (“Diamond cutting and polishing,” 2008). By the following year, however, they all had closed, unable to compete with operations in India and China; this resulted in the loss of CAD$22 million in territorial government investments (Danylchuk, 2011). Attempts to revive a large cutting industry in Yellowknife have not succeeded, and currently there is only one cutting and polishing plant operating (Danylchuk, 2015).

Despite the demise of the local cutting industry, Dominion invested CAD$600,000 in 2015 in branding Diavik and Ekati diamonds by reviving the CanadaMark, a marketing program that was suspended after the local diamond operations closed. The CanadaMark brand is a mine-to-market custody chain designed to give diamond buyers the assurance that their purchases have been ethically sourced in Canada and processed by approved manufacturers. The diamond manufacturers selected to produce the CanadaMark come from the company’s existing customer base in India and Israel, and they are continually audited to ensure sourcing and quality standards. Participating manufacturers offer the CanadaMark diamonds to retail clients who have signed up for the program.

Dominion targets the younger generation through various social media platforms and traditional advertising in print magazines. This age group is very concerned about ethical sourcing, so the chain-of-custody audit is necessary to provide this as well as the assurance that the diamond is truly Canadian.

Dominion hopes CanadaMark diamonds will eventually carry a premium over unbranded diamonds. The company’s focus group research indicates that Canadian consumers will pay as much as 10% more, while buyers in the U.S. and Europe are willing to pay an additional 4% to 5%. Chinese buyers, however, noted they were unwilling to pay any premium based on country of origin (B. Bell and J. Pounds, pers. comms., 2015).

STUDIES OF THE DIAMONDS

Donnelly et al. (2007) presented results from a study of 100 inclusion-bearing Diavik diamonds that had been selected from more than 10,000 carats of “run of mine” production. They found that 83% of the diamonds were derived from peridotitic mantle source rocks, with Mg-chromite and olivine by far the most common mineral inclusions. Van Rythoven and Schulze (2009) examined inclusions and crystal morphology in a group of 110 Diavik diamonds. They also concluded that the majority were peridotitic, and that multiple growth and resorption events had affected diamonds from the A154 South pipe.

To further characterize the production from Diavik, in 2015 GIA acquired over 777 carats from Dominion Diamond. Of these, nearly 500 carats (326 samples) were gem-quality single-crystal diamonds, with the remainder consisting of bort, which was not part of this study. The 326 gem-quality rough diamonds ranged from 1.20 to 1.80 ct, and mainly included D-to-Z range (236), brown (70), yellow (3), gray (16), and pinkish (1) colors (figure 24). Several of the diamonds contained dark-colored inclusions that were assumed to be sulfides and other minerals (figure 25). Since both studies mentioned above were concerned with the inclusions in Diavik diamonds, we decided to focus our characterization on different aspects of the diamonds. Each of the 326 gem-quality diamonds was evaluated for crystal morphology, DiamondView fluorescence, and absorption spectra (FTIR and UV-Vis-NIR).

Figure 24. Representative colors of Diavik rough diamonds, ranging from colorless to
brown to yellow with one pink crystal. Also shown are several coated crystals. Photos
by Jian Xin (Jae) Liao.

Figure 25. Several of the Diavik diamonds exhibited dark inclusions, presumably sulfide
minerals. Photos by Jian Xin (Jae) Liao.

The Diavik rough diamonds examined were dominated by octahedral forms with varying amounts of resorption (figure 26). Of the 326 samples examined, 63% (206 diamonds) showed well-developed octahedral forms with little or no resorption toward the dodecahedral form. Twenty stones were very strongly resorbed to dodecahedral forms. Two showed cube forms, and 14 others appeared to be resorbed cubes that resulted in “hopper” forms. The shapes of 22 diamonds were dominated by twinning, with 17 of those being macles. Irregular forms were observed in 43 diamonds, and an additional 19 samples showed octahedral forms but had a complete or partial coating of light or dark fibrous diamond around a gem-quality interior (figure 27). Many of the rough octahedral diamonds without a coating showed strongly etched crystal surfaces, similar to those seen beneath the fibrous layer on the coated diamonds (where the coating was broken off), suggesting that a much larger proportion of Diavik rough diamonds was coated at one time.

Figure 26. The morphology of the Diavik diamonds was dominated by octahedral forms
that displayed varying amounts of resorption. Cube, twinned, and irregular forms were
also present. Photos by Jian Xin (Jae) Liao.