Gold, diamonds and iron ore have made of mining the main contributor to Canada’s Nunavut Gross domestic product (GDP), eclipsing even the government, an official source told Winnipeg Free Press recently. But from all the riches the 13-year-old territory has to offer, experts now believe that diamonds will play the biggest role in Nunavut and Canada’s future.
According to geologist and diamond expert, Herb Helmstaedt, the potential of the region to grow the nation into a precious gems-mining powerhouse, is simple huge.
“Canada [is a] newcomer to the show, but in value by country, Canada is the best,” the expert said in a lecture at Queen’s University, as reported by Nunatsiaq Online.
Helmstaedt, who has travelled everywhere from India to the Arctic to learn more about the topic, has accumulated enough data to prove Canada currently stands at the very top of that diamond value chart, beating well known producers such as Botswana, Russia and Australia.
Canada’s diamonds, says the Nunatsiaq Online article, brought in almost $12 billion between 1995 and 2005, which is nearly $2 billion more than what Australian diamond miners earned in the same period.
There are several diamond exploration projects currently ongoing in the country’s newest territory, but most of them seem to have hot a rough patch.
In September, Shear Diamonds (CVE:SRM) decided to put on hold its bullish plan to revitalize Nunavut’s Jericho diamond mine, which last functioned from 2006 to 2008, only months after it restarted operations. The troubled junior blamed international prices for its decision.
On Nov. 15, it announced that was facing new challenges, including the loss of top executives and a debt of about $3 million to the Belgian diamond firm Taché.
In the news release, Shear hinted it is looking for a buyer as it said it wanted to enter into “a transaction, whether financing, joint venture, sale or otherwise that will either allow Shear to advance its Jericho project or to otherwise realize value for Shear’s stakeholders.”
Meanwhile, De Beers Canada and Peregrine Diamonds (TSX:PGD) teamed up in September to develop Chidliak in a deal that will eventually give De Beers majority ownership of the property.
Iron ore and gold
If Helmstaedt’s predictions flunk, Nunavut have a vast range of other mineral resources to lean on.
A massive open-pit iron mine proposed on northern Baffin Island could become the North’s largest industrial development to date, but Nunavut residents are divided over what it would mean for the territory.
The Mary River mine, proposed by Baffinland Iron Mines Corporation, would cost about $4 billion to build and its royalties would go directly to the Inuit, instead of the territorial government.
Failing that, recent reports claim there is a considerable gold deposit in Nunavut’s backyard for billions of years. The Meliadine property in Rankin Inlet is owned by Agnico-Eagle Mines (NYSE, TSX:AEM), which also owns Nunavut’s only operating mine, Meadowbank Gold.
According to the Mining Association of Canada (MAC), Meadowbank is a good example of the positive economic and social benefits mining has had on the region in terms of much-needed employment, skills training and local business development.
Since the mine opened in 2010, Nunavut’s GDP has increased by 12%, primarily due to the impact of the Meadowbank mine. The mine currently employs more than 750 permanent employees, 36% of which are Inuit.