Diamond rush expected in Finnish Karelia
Prospector Roy Spencer hopes to help set up Europe's first diamond mine in Finland
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By Markku Saksa
Roy Spencer, 57, a South-African born Australian geologist, watches as the green, football-sized boulders run up the conveyor belt. The rocks go through a crusher which reduces them to gravel
The pebbles, the size of fingertips, end up in a drum, which separates the light fragments from the heavy ones. The heavy pieces are passed on for further processing - the search for diamonds among them.
Spencer is a diamond prospector with an international reputation, who found one of the world's richest diamond deposits in Russian Karelia in the 1990s. The deposit made him a legend in the field.
Now Spencer is back in Karelia - this time, on the Finnish side of the border. He is investigating Finland's hitherto most promising diamond deposit in Lahtojoki in the municipality of Kaavi.
If things go well, Europe's first diamond mine will be set up there. "That would be a cause for satisfaction for an old diamond man", Spencer muses.
The Lahtojoki diamonds are currently under analysis in Outokumpu, at the pilot plant operated by the Geological Survey of Finland (GTK).
The noise of the crusher does not extend to the factory's laboratory.
A number of geologists working for European Diamonds, a company managed by Spencer, sit in a brightly-lit room. Oliver Bayley, Buddy Doyle, Andrew Birnie, and one Finn, Heini Laine, use tweezers to pick the diamonds out of the other material.
Spencer shows the diamonds that have been taken from an experimental sample. They are the size of dill seeds, and cover the bottom of a test tube. A few larger specimens can also be found.
The first stones are excellent in colour. Spencer's geologists praise the quality. When viewed with the naked eye, they are light grey in colour - something like dishwater. However, under the microscope they are colourless and bright.
The experimental load of about 2,000 tonnes that was dug up in Lahtojoki has been examined once, and will be examined more closely at a later time. The diamonds that were found have been small, but nevertheless, they have been a source of joy.
Within a few weeks it will be determined if an actual diamond mine will be set up in Lahtojoki.
As we meet again in Helsinki, Spencer sips a latte at the Strindberg café, enjoying the bright winter morning view of the Esplanade Park.
He is glad to be on the Finnish side of the border drilling diamonds out of the Karelian bedrock. There are more creature comforts in Finland.
However, Spencer is no armchair hero. He spent the years from 1993 to 1999 in Russia leading an international diamond prospecting team. He lived in a tent in the Karelian wilderness for months. The conditions offered by nature were rugged, and the political conditions were also uncomfortable; communism had only recently collapsed.
"There were mosquitoes in the summer. In the winter the diesel fuel would run out in the cold weather, and it was almost impossible to get any more."
The temperatures of -30° Celsius were all the more difficult to deal with, as Spencer went to Russia straight from Borneo, where the temperature reading was about the same as in Russia, but on the plus scale.
"The research group of 20 men slept in two Russian tents. They had holes through which we could see stars in the evening. In retrospect it was a great experience, even though we could take showers only at two-week intervals."
The discomfort nevertheless paid off. A group of prospectors of the Canadian Archangelsk Diamond Corporation found the very rich Grib diamond deposit - the most dramatic event of Spencer's life so far.
"We had the use of basic data from airborne magnetic imaging taken during the communist era. We took samples on their basis, drew conclusions, and made guesses, until one day, the drill struck kimberlite."
Finland can expect a rush of diamond prospectors if the Lahtojoki mine becomes a reality, Spencer says. The forests will be buzzing with people collecting samples with shovels and buckets.
Already now six different prospecting companies are looking for diamonds in Finland.
Mother Nature has not thrown diamonds here and there at random. They can be found in areas with old, thick, cooled bedrock.
The diamonds have risen to the surface from a depth of 200 kilometres, under tremendous pressure and high temperatures. They can be found in a mineral known as kimberlite, in "pipes" in the shape of carrots, on top of which, on the surface, are craters with low edges. About 30 such pipes have been found in Finland.
The Grib deposit is located beneath the ancient Karelian plate of bedrock, or craton. A factory to exploit the mines there is to be built 120 kilometres north-northeast of the Russian city of Arkhangelsk.
The same plate of bedrock contains the Lomonosova diamond deposits, with an estimated value of EUR 4-12 billion.
"As a geological area, the part of the craton on the Finnish side is exactly the same. Therefore, it would not be crazy to assume that mines equally rich could be found on the Finnish side."
The Lahtojoki deposit was first located over a decade ago by the Finnish-Australian company Malmikaivos Oy, which has since suspended prospecting activities after a failed refining experiment.
If enough diamonds are found in Lahtojoki for the needs of a mine, Spencer's company plans to keep the mine for itself.
Spencer already knows what he will do if he gets rich from Finnish diamonds: he plans to celebrate at Helsinki restaurants for a couple of days, after which he will go back into the bush to look for diamonds.
The South African mining giant De Beers acquired the prospecting company that located the Grib Deposit. However, utilising the diamonds proved to be more difficult than expected.
Currently De Beers is locked in a dispute with the Russian government over how to divide the profits from the deposit. The dispute is being handled in courts of arbitration in several places, including Stockholm.
Spencer has not lost sleep over the dispute. "I don't have a penny at stake in it. I was just a paid employee of De Beers."
Nevertheless, with the wisdom brought on by this experience, Spencer decided that he would no longer work for anyone but himself and his business partners. He set up a diamond prospecting company of his own.
"I took a leap into the dark. The first years I had to travel constantly. There was very little money coming in, and my family had it quite rough financially. Later the situation eased somewhat.
Spencer's company now has several mining claims in Finland. Experimental excavations have begun only in Lahtojoki. The company also has a diamond mine in the Kingdom of Lesotho - an enclave within South Africa.
Spencer praises the expertise of the Geological Survey of Finland. "They have the world's best scientific prospecting method. Not even in South Africa are they as knowledgeable as in Finland."
Spencer says that the GTK's diamond doctors Jukka Marmo, Hugh O'Brien, and Marja Lehtonen, as well as the present head of research Pekka Nurmi have all been important partners in cooperation for him.
Spencer also says that Finland is the most pleasant country where he has searched for diamonds. Here a diamond man can sleep in a real apartment or hotel, call London on his mobile telephone, and go to a public swimming pool or a bar in the evening.
On the Canadian tundra, for instance, it is first necessary to build an airfield, then bring in heavy machinery, building materials for housing, and thousands of other items that are flown to a distant location, or driven to the tundra across a winter road.
In Finland the infrastructure works, interaction with officials functions well, and there is professionally skilled labour available.
There are not many professional diamond prospectors around the world. All of them know each other either personally, or by reputation, and are conscious of each other's abilities.
Diamond prospectors work in small companies that are formed around new projects, as was the case with Roy Spencer's enterprise.
Before a prospecting trip, the small companies will solicit financing from investors or the stock market. Then they go into the field - often facing tough conditions in the Canadian tundra, Australian deserts, or in Africa.
The prospectors first collect mineral samples from loose sediment. After their analysis, they will drill deeper in areas that seem promising. Prospecting expeditions can take years and cost millions of euros.
Large mining companies such as De Beers or Rio Tinto are usually not involved in prospecting themselves. They will come onto the scene with their money only when the prospectors find something of interest.
When this happens, the companies will usually offer to buy the claim either in its entirety, or partially, in which case the prospecting company gets a minority holding. The haggling can be intense, because the small companies are often close to bankruptcy, after years of excavations.
"They say in the business, don't fall in love with your project; sell just as soon as the price is right", Spencer explains.
Diamond prospecting is a profitable business at the moment, with demand for the gems outstripping supply and prices rising constantly.
The large diamond mines in South Africa are being depleted. The new Canadian diamonds are small, and digging them from under the permafrost is expensive. Now more and more diamonds are going to India and China, because more people there can afford a diamond engagement ring.
Institutional investors have been setting up several funds specialised in diamonds.
More artificial diamonds of better quality are also coming onto the market. The largest of the gems are the size of peas, but the price is just a tenth of that of the genuine article. They cannot be distinguished from real diamonds by the naked eye - special instruments are needed for this.
Spencer envertheless is confident that there will continue to be demand for genuine diamonds. "Who would have the nerve to buy his fiancee an artificial diamond?"
There have been protests in Finland recently against plans to set up uranium mines. Should we be worried about diamond mines?
The footprint inflicted by diamond mines on nature is small, Spencer says reassuringly. It can be covered up by dismantling the mine structures and landscaping the area again. He adds that no toxic chemicals are needed in diamond prospecting and excavation.
Helsingin Sanomat / First published in print 26.2.2006
Roy Spencer, 57, a South-African born Australian geologist, watches as the green, football-sized boulders run up the conveyor belt. The rocks go through a crusher which reduces them to gravel
The pebbles, the size of fingertips, end up in a drum, which separates the light fragments from the heavy ones. The heavy pieces are passed on for further processing - the search for diamonds among them.
Spencer is a diamond prospector with an international reputation, who found one of the world's richest diamond deposits in Russian Karelia in the 1990s. The deposit made him a legend in the field.
Now Spencer is back in Karelia - this time, on the Finnish side of the border. He is investigating Finland's hitherto most promising diamond deposit in Lahtojoki in the municipality of Kaavi.
If things go well, Europe's first diamond mine will be set up there. "That would be a cause for satisfaction for an old diamond man", Spencer muses.
The Lahtojoki diamonds are currently under analysis in Outokumpu, at the pilot plant operated by the Geological Survey of Finland (GTK).
The noise of the crusher does not extend to the factory's laboratory.
A number of geologists working for European Diamonds, a company managed by Spencer, sit in a brightly-lit room. Oliver Bayley, Buddy Doyle, Andrew Birnie, and one Finn, Heini Laine, use tweezers to pick the diamonds out of the other material.
Spencer shows the diamonds that have been taken from an experimental sample. They are the size of dill seeds, and cover the bottom of a test tube. A few larger specimens can also be found.
The first stones are excellent in colour. Spencer's geologists praise the quality. When viewed with the naked eye, they are light grey in colour - something like dishwater. However, under the microscope they are colourless and bright.
The experimental load of about 2,000 tonnes that was dug up in Lahtojoki has been examined once, and will be examined more closely at a later time. The diamonds that were found have been small, but nevertheless, they have been a source of joy.
Within a few weeks it will be determined if an actual diamond mine will be set up in Lahtojoki.
As we meet again in Helsinki, Spencer sips a latte at the Strindberg café, enjoying the bright winter morning view of the Esplanade Park.
He is glad to be on the Finnish side of the border drilling diamonds out of the Karelian bedrock. There are more creature comforts in Finland.
However, Spencer is no armchair hero. He spent the years from 1993 to 1999 in Russia leading an international diamond prospecting team. He lived in a tent in the Karelian wilderness for months. The conditions offered by nature were rugged, and the political conditions were also uncomfortable; communism had only recently collapsed.
"There were mosquitoes in the summer. In the winter the diesel fuel would run out in the cold weather, and it was almost impossible to get any more."
The temperatures of -30° Celsius were all the more difficult to deal with, as Spencer went to Russia straight from Borneo, where the temperature reading was about the same as in Russia, but on the plus scale.
"The research group of 20 men slept in two Russian tents. They had holes through which we could see stars in the evening. In retrospect it was a great experience, even though we could take showers only at two-week intervals."
The discomfort nevertheless paid off. A group of prospectors of the Canadian Archangelsk Diamond Corporation found the very rich Grib diamond deposit - the most dramatic event of Spencer's life so far.
"We had the use of basic data from airborne magnetic imaging taken during the communist era. We took samples on their basis, drew conclusions, and made guesses, until one day, the drill struck kimberlite."
Finland can expect a rush of diamond prospectors if the Lahtojoki mine becomes a reality, Spencer says. The forests will be buzzing with people collecting samples with shovels and buckets.
Already now six different prospecting companies are looking for diamonds in Finland.
Mother Nature has not thrown diamonds here and there at random. They can be found in areas with old, thick, cooled bedrock.
The diamonds have risen to the surface from a depth of 200 kilometres, under tremendous pressure and high temperatures. They can be found in a mineral known as kimberlite, in "pipes" in the shape of carrots, on top of which, on the surface, are craters with low edges. About 30 such pipes have been found in Finland.
The Grib deposit is located beneath the ancient Karelian plate of bedrock, or craton. A factory to exploit the mines there is to be built 120 kilometres north-northeast of the Russian city of Arkhangelsk.
The same plate of bedrock contains the Lomonosova diamond deposits, with an estimated value of EUR 4-12 billion.
"As a geological area, the part of the craton on the Finnish side is exactly the same. Therefore, it would not be crazy to assume that mines equally rich could be found on the Finnish side."
The Lahtojoki deposit was first located over a decade ago by the Finnish-Australian company Malmikaivos Oy, which has since suspended prospecting activities after a failed refining experiment.
If enough diamonds are found in Lahtojoki for the needs of a mine, Spencer's company plans to keep the mine for itself.
Spencer already knows what he will do if he gets rich from Finnish diamonds: he plans to celebrate at Helsinki restaurants for a couple of days, after which he will go back into the bush to look for diamonds.
The South African mining giant De Beers acquired the prospecting company that located the Grib Deposit. However, utilising the diamonds proved to be more difficult than expected.
Currently De Beers is locked in a dispute with the Russian government over how to divide the profits from the deposit. The dispute is being handled in courts of arbitration in several places, including Stockholm.
Spencer has not lost sleep over the dispute. "I don't have a penny at stake in it. I was just a paid employee of De Beers."
Nevertheless, with the wisdom brought on by this experience, Spencer decided that he would no longer work for anyone but himself and his business partners. He set up a diamond prospecting company of his own.
"I took a leap into the dark. The first years I had to travel constantly. There was very little money coming in, and my family had it quite rough financially. Later the situation eased somewhat.
Spencer's company now has several mining claims in Finland. Experimental excavations have begun only in Lahtojoki. The company also has a diamond mine in the Kingdom of Lesotho - an enclave within South Africa.
Spencer praises the expertise of the Geological Survey of Finland. "They have the world's best scientific prospecting method. Not even in South Africa are they as knowledgeable as in Finland."
Spencer says that the GTK's diamond doctors Jukka Marmo, Hugh O'Brien, and Marja Lehtonen, as well as the present head of research Pekka Nurmi have all been important partners in cooperation for him.
Spencer also says that Finland is the most pleasant country where he has searched for diamonds. Here a diamond man can sleep in a real apartment or hotel, call London on his mobile telephone, and go to a public swimming pool or a bar in the evening.
On the Canadian tundra, for instance, it is first necessary to build an airfield, then bring in heavy machinery, building materials for housing, and thousands of other items that are flown to a distant location, or driven to the tundra across a winter road.
In Finland the infrastructure works, interaction with officials functions well, and there is professionally skilled labour available.
There are not many professional diamond prospectors around the world. All of them know each other either personally, or by reputation, and are conscious of each other's abilities.
Diamond prospectors work in small companies that are formed around new projects, as was the case with Roy Spencer's enterprise.
Before a prospecting trip, the small companies will solicit financing from investors or the stock market. Then they go into the field - often facing tough conditions in the Canadian tundra, Australian deserts, or in Africa.
The prospectors first collect mineral samples from loose sediment. After their analysis, they will drill deeper in areas that seem promising. Prospecting expeditions can take years and cost millions of euros.
Large mining companies such as De Beers or Rio Tinto are usually not involved in prospecting themselves. They will come onto the scene with their money only when the prospectors find something of interest.
When this happens, the companies will usually offer to buy the claim either in its entirety, or partially, in which case the prospecting company gets a minority holding. The haggling can be intense, because the small companies are often close to bankruptcy, after years of excavations.
"They say in the business, don't fall in love with your project; sell just as soon as the price is right", Spencer explains.
Diamond prospecting is a profitable business at the moment, with demand for the gems outstripping supply and prices rising constantly.
The large diamond mines in South Africa are being depleted. The new Canadian diamonds are small, and digging them from under the permafrost is expensive. Now more and more diamonds are going to India and China, because more people there can afford a diamond engagement ring.
Institutional investors have been setting up several funds specialised in diamonds.
More artificial diamonds of better quality are also coming onto the market. The largest of the gems are the size of peas, but the price is just a tenth of that of the genuine article. They cannot be distinguished from real diamonds by the naked eye - special instruments are needed for this.
Spencer envertheless is confident that there will continue to be demand for genuine diamonds. "Who would have the nerve to buy his fiancee an artificial diamond?"
There have been protests in Finland recently against plans to set up uranium mines. Should we be worried about diamond mines?
The footprint inflicted by diamond mines on nature is small, Spencer says reassuringly. It can be covered up by dismantling the mine structures and landscaping the area again. He adds that no toxic chemicals are needed in diamond prospecting and excavation.
Helsingin Sanomat / First published in print 26.2.2006
Helsingin Sanomat