MINER DETAILS; Diamond find won’t help mining

The recent rush to find diamonds in Canada’s far north is fun, but it really isn’t what Canada’s mining industry needs today. The money being spent finding the makings of future diamond rings would be better put to use finding reserves of copper, zinc and other metals — the useful minerals that Canada is so quickly running out of.

There have been flurries of excitement over diamond “discoveries” in Canada over the years, most notably in northern Saskatchewan and near Kirkland Lake, Ont., but there’s never been anything like what is going on in the Northwest Territories today.

When Dia Met Minerals and BHP-Utah recovered 81 small diamonds from a kimberlite pipe on their Lac de Gras property north of Yellowknife last fall, it touched off the largest staking spree in Canadian history. At last count some 23,000 square km were recorded by a myriad of companies, large and small. This year, it seems, diamond exploration is the only game in town. And why not? The geological potential for an economic diamond deposit in Canada is favorable and the potential return on investment in a penny stock involved in such a find is staggering.

But the value of diamonds is a transient thing. Unlike minerals that are used in an industrial society, diamonds are virtually worthless, almost completely replaced by synthetic diamonds for industrial use.

The only reason diamonds command a high price is because of the remarkable cartel that controls the diamond market and its brilliant marketing strategy that has convinced the world that it needs these crystallized bits of carbon. But cartels, without exception, eventually collapse. In recent times it happened with oil in 1973 and with tin in 1986. Perhaps the diamond cartel will fare better, but the odds are definitely against it.

What this country really needs are large, good grade deposits of metals that are used in our industrial society — minerals whose worth is determined by how useful they are to mankind by improving people’s lives.

Thanks to all the “extra” costs of mining in Canada, efforts to find those kinds of mineral deposits have shifted to elsewhere on the globe. Here, as we approach the summer of 1992, it seems the only way to attract investment in mineral exploration is to offer a high-stakes gamble on a mineral whose worth bears no relation to its use.

And that is a sad commentary on the state of mining in Canada today.