Americas / Aboriginal Relations

Mining Diamonds in the Land of the Midnight Sun

A diamond mine in Canada that is a good place to work and designed to be socially responsible? Yes, it is real. But it did not come about easily.

Luxembourg-based mining consortium De Beers has launched a new mining project in Canada’s Northwest Territories, called Gahcho Kué, with the goal of fully incorporating conspicuous elements of social responsibility. Gahcho Kué is the world’s largest new diamond mine under development, and it is poised to become a major Canadian high-grade producer of diamonds for many years.

Ventures by outside groups expose a troubling power dynamic. Despite the undeniable romance and adventure of the high north—lightless tracts of tundra seized with winter’s brutal grip and summer months of midnight sun—a plain truth affects the lives of all residents of the Northwest Territories: many of the decisions about their future are made in distant places by individuals far removed from the northern way of life. Why is Gahcho Kué different?

Diamond mining is not a pretty business. Open-pit mining, the traditional method of sourcing diamonds, involves blasting layers of rock to gain access to unusual features that geologists call kimberlite pipes. Kimberlite is an igneous rock that forms when molten carbon-containing material endures tremendous heat and pressure, a process that allows the carbon to crystallize and form rough diamonds. The diamonds reached the earth’s surface through kimberlite volcanic eruptions, the last of which occurred one hundred million years ago. Pit mining uses hydraulic shovels, trucks, and other heavy machinery to mine those diamonds nearest the surface, sometimes covered only by a thin layer of sand and gravel. The earliest prospectors were ill-equipped and simply had a nose for diamonds. But modern prospectors are typically highly qualified professionals, armed with degrees and sophisticated instruments. Despite the increasing incorporation of technology into diamond sourcing, the methods used to extract and prepare them for the consumer have hardly changed over the last century.

Although the process of mining diamonds remains virtually the same, other aspects of the diamond business are rapidly changing. In recent decades, the industry has faced increasing pressure to ensure that market-ready diamonds are produced ethically. Activists have brought to light the problem of “dirty” diamonds mined by workers who are essentially slaves and have to work in horrendous heat and darkness. Increasing consumer awareness about the sources of these precious stones is beginning to have an effect. De Beers, historically the biggest producer and wholesaler in the diamond industry, has bolstered its bottom line through mining practices that show a growing sense of social responsibility: training workers, building roads for the public, and investing in local communities. The relatively recent consumer demand for ethically produced diamonds is also altering the way in which new mines are built and operated.

The Gahcho Kué project comes at a good time for Canada because the gross domestic product of the Northwest Territories is in decline. Despite the promising productive capacity of this new mine, Gahcho Kué is remote: it is located almost 200 miles from Yellowknife, the capital city of the Northwest Territories with a population of under twenty thousand. The construction and operation of a new diamond mine is a tremendous undertaking anywhere, but it is especially challenging in a remote area with sparse transportation infrastructure and a dwindling working-age population. The mine will require vehicles to ferry materials to and from the extraction site, improved roads to bear increased traffic, and new workers to manage every phase of the project.

The developers of Gahcho Kué had to go beyond considering the profitability of selling new gem-quality and industrial diamonds; they also attached a value to their investment in training the workforce and creating infrastructure in an impoverished part of Canada. Then they balanced these positive aspects against the environmental and social concerns associated with mining operations in pristine, remote environments.

De Beers Canada maintains that the project will bring significant economic benefits to the Northwest Territories and to Canada as a whole. Gahcho Kué is expected to employ about seven hundred people during the two years of construction and four hundred people to operate the mine thereafter. De Beers Canada Chief Operating Officer Glen Koropchuk has said that the years of working collaboratively with the local communities near the Gahcho Kué site helped shape the project design. “We are confident that the project is not only technically sound, but also reflects our commitment to sustainable development by listening to our community partners and incorporating key input that makes this project viable and respects local priorities,” he said.

The local priorities he mentions belong largely to Northwest Territories First Nations, or Canadians of aboriginal descent, who constitute the majority of the territory’s rural population. More than a dozen First Nations bands are involved, each with its own interests and concerns related to the Gahcho Kué project. A key challenge for them is establishing cohesion among the various First Nation bands and finding ways to align federal and territorial funding with their collective priorities.

De Beers has entered into numerous formal agreements with local First Nation governments. These commitments, which are known as impact benefit agreements (IBAs), set out how De Beers and First Nations will work together during the life of the mine, and specify how community members will share in the opportunities that the mine provides.

Under the IBA negotiated with the Lutsel K’e Dene, for example, the proposed mining project would respect the First Nation’s culture and provide certainty of training, employment, and business opportunities for community members, including “financial provisions” necessary to ensure fair participation in the construction and operating phases of the mine. “If we work together with the other First Nations, then we will be powerful. This agreement ensures that we have our families out on the land, using our land. We are shaping resource development the way we want it, according to First Nations. We are going to be monitoring it,” said Chief Felix Lockhart of the Lutsel K’e Dene.

Northern Canada is an expensive place to live and work, and federal support will be needed for decades to come. There are opportunities for economic growth led by the lucrative mining and construction industries, but these possibilities will require federal support to establish the infrastructure needed to create an integrated northern economy. The Canadian government will have to consider its northern territories as an integral part of the country, both economically and culturally, not just as remote, little-used national space. This requires, first and foremost, that industrial developers like De Beers recognize the traditional territory of local communities, such as the Lutsel K’e Dene’s, through IBAs implemented through the federal government. Only then may these First Nations make a step forward on the road to economic independence and prosperity, a historically rare outcome for communities caught amidst the frenzied activity of diamond supply.

Policymakers should know that this region offers tremendous promise, and only if the interests of communities and developers align. The future of the Northwest Territories should include improved partnerships involving the territorial government, developers, and residents, both rural and urban. The growth of industry cannot proceed without input from local inhabitants, as the Gahcho Kué example serves to show.

But locals themselves must make the decision to allow the expansion of commercial activity in the Canadian North, and this will be possible only if locals are allowed to have a greater influence in the legislative process. Communities feel conflicted about economic development in the Northwest Territories, and they want to preserve the power of choice. In order for the diamond industry to move forward sustainably, extraction companies like De Beers must reformulate their business models to encompass practices that are increasingly important for people around the world, namely sourcing jobs locally for safe work, boosting household income for families in the region, and of course, involving locals in the creation of products for which we have a genuine need.

We want and need diamonds. The Gahcho Kué project, and other developments like it, challenges us to mine diamonds in ways that offer suitable protection to a uniquely beautiful part of the world and the people who have lived there for millennia.