The Real Value of Victor Project

Construction of Ontario’s first diamond mine–the Victor project owned by De Beers Canada–is well underway (see CMJ October 2006). Production is expected to begin in 2008, and the diamonds mined will be some of the most beautiful in the world.

The estimated value of rough from the Victor mine–at US$400 per carat–is exceptionally high. The stones are characterized by their crystalline shapes, white colour and clarity. Virtually all the diamonds recovered during exploration and bulk sampling were gem quality.

With such a glittering prize to be had, the De Beers board gave the go-ahead to the project in May 2005. It is a Cdn$982-million commitment. Approximately 6.0 million carats of diamonds will be produced over the anticipated 12-year life of the project. Operating costs are estimated at $42/tonne for 2.7 million tonnes/year. Revenue is expected to be $120/tonne. Plus De Beers has identified 18 other kimberlites in this area of the James Bay Lowlands, so the potential for additional resources is high.

The economic benefits of the Victor project will be broadly distributed. The company firmly believes in what it calls the “triple bottom line”. It has assessed sustainability based on economic, social and environmental parameters. Joint venture companies have been created with the local Aboriginal bands, impact benefit and participation agreements have been crafted, mechanisms are in place for education and training of a local workforce, and a closure plan has been drawn up.

The nearly $1 billion that De Beers will inject into the provincial economy is expected to create a cumulative GDP impact of $6.7 billion over the life of the mine. Of the $6.7 billion, $4.2 billion will stay in northeastern Ontario.

The 375 mining and mineral processing jobs created by the Victor project will also have far-reaching effects. De Beers estimates there will be an additional 3,200 secondary jobs created in Ontario, and 1,500 of those will be in the James Bay region. Plus, there are approximately 600 construction jobs to be filled during the next two years.

The Victor project is looking like a win/win situation. It will be a winner for local people in terms of wealth and job-creation. It will be a winner for De Beers in terms of profitability. And anyone lucky enough to own a Victor diamond will surely feel like a winner.