Canada is the youngest player in the world of diamond mining. In the last decade, Canada's diamond production gained from scratch to becoming the third largest in the world, with only 4 mines: Ekati, Diavik, Snap Lake and Victor, who just won the title "the mine of the year". The Canadian production has reached 10% of the global supply in means of carat and 14% in terms of American dollars.

Canada is the second largest country in the world after Russia, with an area of some 10 million sq.km. In addition to diamonds, Canada owns other natural resources, such as iron, copper, wood, natural gas, oil and more. These natural resources and Canada's geographic location just up to the U.S.A, and is the key for its economic stability and success. Today Canada is the world's ninth largest economy. Despite the fact that in 2008 there was a further deceleration due to the considerable dependency upon the US economy, the Canadian economy is expected to recover and achieve a growth rate of 2.3% in 2009.

The first diamond mine in Canada was discovered only in 1991 in the cold and almost arctic Northwest Territories, which led to the opening of the Ekati mine. But the search for diamonds in Canada began many years ago, and it is full with stories of desperate broke diamond hunters who left their family and life just to be the firsts to find indicates for diamonds in the wild. In discreet and on secret missions, De Beers and other diamond and mining companies sent spies and double agents to collect sand samples and inelegance.

Most of the searchers didn't even say they were looking for diamonds, and used gold as their reason. Among the famous and today's rich pioneers are Chuck Pipke, Stuart Blusson, Grenville Thomas and his daughter Eira, which was only 6 years old when he took her with him to the Canadian arctic.

Today the Canadian diamond industry is sort of a miracle. In such a short time, it managed to increase and expand its diamond production. The total diamond production in Canada for 2008 rose 30% from 2007, and summed at $2.25 billion.

Although the vivid diamond industry, polishing factories are not common in Canada. Recently Canada opened a new diamond exchange.

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When Chinalco (Aluminum Corporation of China,) a state-owned alumina refiner, proposed a takeover of Australia's largest mining company, Rio Tinto, the move was perceived as more than just business. "Chinalco marches into capitalism's heart" cried Australia's "The Age."

Australia's Rio Tinto turned down the $19.5 billion deal, an offer to purchase 18% of the mining giant's shares, thus "dealing a blow to China's ambitions to buy access to raw materials crucial for its economic growth," as the Wall Street Journal put it. Other than alumina, aluminum and bauxite, Rio Tinto mines produce a wealth of resources: borates, coal, copper, diamonds, gold and silver, gypsum, iron ore, molybdenum, salt, sulfuric acid, talc, uranium and titanium dioxide.

The mining company favored a joint venture with BHP Billiton instead. Four Rio Tinto workers were arrested last week in Beijing and are being held by an arm of the Chinese government. Australia's embassy in Beijing was denied access to the men. ABC news quotes Senator Joyce who said "That all these state-owned enterprises and the Chinese Government itself or the Communist People's Republic government is one as the same, and ramifications to one is ramifications to all." “We are all aware of the sensitivities in China, we are watching the situation very closely,” Chief Executive Officer Andrew Forrest is quoted as saying in bloomber.com.

No doubt that the government of China has taken a slight. While Japan's enterprises in Australia are welcomed, relations with China have always been a little reserved. The issue of relationship with China and Premier Colin Barnett and his cabinet met today in preparation for his visit there.

I personally suspect that the sensitivity and volatility of the global economical situation sharpens everyone's sense of vulnerability. Countries who stock on energy and other resources can create more leverage now then every before.

This relates to a growing concern regarding Russia's stockpiling of diamonds. While diamond mining companies around the world reduce production of refined diamonds, halting as much as all or 90% of diamond production, Russia's state-owned mining company, Alrosa, reduced production by less then 2%, but not selling them in world markets. Russia's intentions and the type of curves and bends in the road that are ahead of us create more than a simple notion of uneasiness.
 

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