Fire and Ice

The Barrens is a shattered landscape of rock and muskeg in the heart of the Northwest Territories. The smaller lakes are too numerous to name, and the largest tell grim tales of early exploration: Misery, Starvation, Disappointment. But the Dogrib natives who call the Barrens home saw great riches in this place. They call the area Ekati, meaning Fat Lake, (in French, Lac de Gras), for the white of the granite boulder, like rumps of caribou marbled with valuable fat.

The Dogribs were right. Marbled inside the rock lies unimaginable wealth – diamonds. Today, the Barrens are pocked with pits so deep you can’t see the bottom. Each pit descends in giant, ragged steps, like a coliseum built to stage Ragnarok. Yellow trucks trundle ore from the depths and along the pale horizon towards Ekati mine, bouncing like tiny sand fleas on a beach log.

The place is a redneck Valhalla, its giant doors ringed perpetually with curtains of heated air to keep the deep freeze outside while equipment moves in and out. Pipe-clogged hallways are hung with signs warning: “An Open Door is an Invitation to Wildlife” in case caribou or grizzly find their way inside. Drums the size of church steeples roll ceaselessly, pummelling an average of 10,000 carats of diamonds daily. X-rays reveal the treasure’s final hiding places. No super-villain was ever so single-minded in his quest.

Ekati is BHP-Billiton Diamond Inc.’s $90-million baby. BHP (Broken Hill Proprietary), the world’s largest diversified resource company, fields over a hundred operations in some 20 countries run by 38,000 workers. Last year they generated turnover of $3.9 billion US, earnings before interest and tax of $3.2 billion and had a market cap of around $32.6 billion. As you can imagine, these guys don’t fool around. The only way out of the processing plant is through a tiny doorway that resembles an airlock on a spaceship. Beyond that bottleneck the living quarters spread out like a James Bond set. The place has everything: squash courts, a lounge, even two golf simulators. On the front steps, one of the miners smokes a cigarette and stares across the Barrens. He’s just begun a two-week stint. He says: “BHP stands for Broken Hills Penitentiary.”

Ekati’s public affairs doyenne Denise Burlingame shows me a display cabinet containing a single day’s take spilled on blue velvet: a cool million in uncut diamonds. All this upheaval for that single jam-jar full of eternity. We sit near a gift shop that hawks key rings and pens encrusted with ersatz gems. “All recovered from cavity searches,” she dead-pans. A longtime Yellowknife resident, she was skeptical when BHP first made its pitch, explaining that – unlike N.W.T.’s depleting staple, gold – diamond mining requires no cyanide or arsenic. But now she believes diamond mining is as green as industry gets.

Personally, I’m still skeptical. What about those doomsday craters outside? A hole that big will last forever.

Diamonds, on the other hand, have only been forever since the Second World War. The De Beers Group cartel’s ticket to greatness was a 1948 ad campaign that pitched its product as the symbol of eternal love. The hook, “A diamond is forever,” recently won Advertising Age magazine’s top slogan of the century, up against heavy hitters like “Just do it!” And they deserved to win. Simply by convincing women that a diamond was the ideal manifestation of their romantic dreams (and convincing men to dedicate two months’ salary to the concept), the slogan transformed a drainage ditch on the De Beers family farm into a $50 billion-a-year industry.

All the gold ever mined would fit into a 25-metre cube. All the diamonds would fit in a room one-tenth that size. That’s because they only leave their molten homeland by accident, carried up through the earth’s crust in sudden and violent geysers of rock called kimberlite pipes.

It was by controlling knowledge of kimberlite that De Beers was able to maintain such tight control of diamond production for so long. But the gambit backfired in 1990 when Angolan terrorists used stolen diamonds to bankroll their torture chambers, flooding the market. The cartel had little choice but to buy up these “blood diamonds.” De Beers’ marketing campaign had centred around images of lovely female hands. The Angolan terrorists’ campaign featured punitive hacking-off of limbs. The two images conflicted. Now De Beers is in damage control mode, and Canadian Arctic diamonds, politically as pure as the driven snow that cloaks Ekati, are suddenly a hot commodity.

At dusk, I clamber onto a 737 with the tail logo painted out. The pilot checks the gravel runway for caribou, then we thunder into a gunmetal sky. There are four limeys from De Beers on the flight. There’s a second mine, Diavik Diamond Mines Inc., 30 kilometres south. That one belongs to Rio Tinto PLC, a London-based megacorp whose cash flow topped $3.7 billion last year, with $1.5 billion in adjusted earnings.

There’s a push for the Big Three to play nice. But the sandbox hasn’t always been this friendly. Five years ago the Barrens fielded an all-out war that finally broke the De Beers cartel’s back.

The trouble began back in 1987 when two prospectors – Charles Fipke and Steward Blusson – found indicator minerals at Lac de Gras. Such minerals exist only in the vicinity of diamonds. Fipke – who started a company called Dia Met Minerals Ltd., based in Kelowna, B.C. which has since been purchased by BHP – is a character. When the National Post ran a photo of him getting jiggy with his beautiful 20ish “assistant” somewhere in the Barrens, he drove all over Kelowna buying up every copy so that his wife wouldn’t see. But he forgot they got home delivery. She was waiting for him at the door with the Post rolled up for whapping.

Once they knew they were onto something, Fipke became convinced that De Beers was spying on Dia Met. He would only discuss operations outdoors, shielding his lips in case he was lip-read by binoculars. He and Blusson doggedly traced the telltale minerals to the shores of Lac de Gras but couldn’t find kimberlite anywhere. Down to their last hundred dollars, they chartered a plane and flew over Point Lake. While marvelling at its perfectly round shape, Fipke suddenly realized the lake was in fact the top of a gigantic kimberlite pipe. The diamonds were under the water.

Thirteen years ago, BHP-Billiton looked at Dia Met’s work and between 1990 and 1997 fronted some $2 million for exploration and permitting. The team began quietly staking 3,900 square kilometres of claims north of Lac de Gras. But unlike highly secretive De Beers and BHP, Dia Met was a public company. It had to disclose any information that might affect share prices. When the story broke that a fortune lay under the frozen lakes of N.W.T., Dia Met’s stocks tripled overnight, and diamond fever took hold.

Prospectors threw stakes from helicopters and claimed they’d been knocked over by grizzlies. BHP ran a giant electrical cable around the kimberlite pipe at Point Lake to throw off airborne magnetic readings. De Beers waited until Sunday morning, when the whole camp was hung over, and buzzed the site with a planeload of instruments. When the madness ebbed, 343,000 square kilometres had been staked, from the tree line near Yellowknife to the shores of the Arctic Ocean and beyond, right out under the waves – just in case any gems had been washed out to sea. So for a spell these ice giants ruled the Barrens. But every Goliath has a David. In this case it was the Dogribs, who waited until BHP was about to break ground at Ekati, then declined to give the First Nations nod until they had wrested major concessions from the colossus. Which is good, because it turns out that while BHP was touting environmental stewardship in the Barrens, they were simultaneously siccing their lawyers on the Wopkaimin natives of Papua New Guinea, whose Ok Tedi river had been devastated by the conglomerate’s copper. BHP was so hot to get its rocks off the tundra that it ceded to demands from both Dogrib and Wopkaimin. When Ekati mine was finally opened in Oct. 1998, it conformed to draconian environmental standards.

The runway at Yellowknife is lumpy with permafrost. Trees stand yellow as butter against the charcoal waters of Great Slave Lake. Diamond fever has this place booming like a Sally Ann base drum. Martin Irving, director of diamond projects for the Government of N.W.T., points out a half-built high-rise condo from his ninth-floor window. “See that? Half the units are sold already.” Irving’s job is to make sure the wealth takes root. N.W.T. is a territory, so all mining revenue goes to Ottawa and comes back by way of government funding. At least, that’s the theory. Over the past five years, the money headed for Liberal coffers has swollen into billions, while the return has actually dropped. But that hasn’t damped the fever. I check the phone book: Diamond Construction. Diamond Cabs. Diamond Glass. Labour’s so tight it’s been heard that companies front prospective employees a third of their mortgage just to get them here. A trailer goes for a hundred grand. PhDs are crashing on couches.

Next morning I pull in to BHP’s sorting facility, where the rough diamonds are graded and dispatched to various buyers. At the barbed-wire, fence I agree to a cavity search “if necessary”, and promise not to pick anything up off the floor, because “The cameras will catch it, and then…,” sales manager Serge Pelletier leaves me to fill in the blanks. The rough stones – pea-sized gravel octahedrons – are graded from white through yellow to brown. Yellow stones are called “fancy”, which is akin to saying a fat person has beautiful hair. Browns, sometimes “fancy”, are often of the industrial grade.

In the past, 35% of the stones went to De Beers while the remaining 65% were retained by BHP. Presently, all of the diamonds are sold through BHP’s sales office in Antwerp, Belgium. However, 10% of the value of production is made available to three diamond cutting and polishing factories in the Northwest Territories – Arslanian Cutting Works (NWT) Ltd., Sirius Diamond Ltd. and Deton’cho Diamonds Inc.

Pelletier proudly shows me Ekati’s finest stone to date, a pear-shaped 10-carat masterpiece. “That would buy you a nice home in Victoria – or a trailer in Yellowknife,” he chuckles.

Next door at the Sirius cutting shop, master diamond cutter Peter Finnemore leads me into a dim grotto behind his office. In order to sparkle, the gems are sawn into shape, bruted against each other, then ground and polished on what look like industrial-strength DJ turntables, called polishing wheels. Roughly 55% of the diamonds end up as dust, but the waste is unavoidable. Facets must be cut at precise angles so that light bounces and magnifies inside, or the heart of the stone will turn dark. Sirius hopes to avoid the blood diamond debacle by marking its stones with a laser image of a polar bear and a serial number. The N.W.T. government at first took exception to this, saying Sirius could use the image, but couldn’t have proprietary rights, because the polar bear belongs to everyone (it’s on the N.W.T. flag). On Feb. 27, the two parties reached an agreement granting Sirius use of the image under a trademark licence for 10 years. BHP marks its stones with a tiny maple leaf.

Next day I fly south to Edmonton. All I can see is water. Great Slave touches both horizons. A solitary whitecap breaks and vanishes. A human life seems like that wave, a part of eternity too small to name, like those myriad lakes in the Barren Lands. Nothing is forever.

After the Barrens, Edmonton seems positively balmy. This is home to many companies that service the diamond industry, such as Nuna Logistics Limited, which has a support office in the city and offers open pit mining, exploration programs and builds the ice road. It takes 91 million litres of diesel to run Ekati alone, and every drop must be trucked in. So every winter Nuna constructs an ice road into the tundra across the tops of a hundred frozen lakes.

In areas of insufficient ice, crews drill holes in it, pump water up from below and spray it onto the surface. The ice is built up in laminates, a few centimetres at a time, like a backyard hockey rink 567 kilometres long. Once the laminate is a metre thick it can hold a 10-ton truck. Sounds dicey? It is. When trucks trundle along the ice road they send a wave rippling under the ice, which can be dangerous for drivers. To control the rippling strict speed limits are enforced.

And that’s just one of numerous miracles that keep Canadian diamonds flowing. Most participants see a bright future. Last October, Ashton Mining of Canada Inc. (now the major diamond employer in the West) president and CEO Robert Boyd addressed the luminaries at the annual diamond hoe-down in Antwerp, a conference with guest speakers including De Beers chairman Nicky Oppenheimer and the president of Botswana. The world is watching, because just two months ago the Diavik mine opened and Snap Lake should be up and running by 2006. Once opened, Canada will move from the fifth-largest diamond producer to the third, trailing only Russia and Botswana.

But there are dissenting voices. On the 16th floor of an obsidian skyscraper in the heart of Edmonton, Dr. Roger Morton opens a steel door that looks like it belongs in a cartoon bank vault. Inside, Morton runs Polar Star Diamonds Ltd., and he’s not happy. He started the first diamond cutting facility in Alberta, but the place has withered from lack of product and high taxes. N.W.T. is a territory, so Polar Star gets hit with 10% excise tax.

“Compare that with anywhere from 0% to 7% tax in the States. That’s why I’m opening a facility elsewhere. Anyway, I’m sick of diamonds. You want a story?”

He shows me a brace of photos from Regal Ridge, a remote wrinkle of rock high in the Yukon, where a team of prospectors just discovered emeralds – the only stones worth more than diamonds. His eyes light up. I know that light. The good doctor has succumbed to emerald frenzy. And the only known cure is another billion-dollar industry.

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