First there was the gold rush, over 100 years ago, when tens of thousands of prospectors with dollar signs in their eyes headed into northern Canada to seek their fortunes. Today it is the diamond rush which is attracting miners. Beneath the barren wastelands of Canada’s arctic tundra there are millions of dollars worth of diamonds. And the new prospectors are digging in.

Canada’s first diamond mine started operating as recently as 1998. Already the country is the world’s third largest producer of diamonds in terms of value, behind Botswana and Russia. Diamonds were first discovered in Canada in 1991, at Point Lake in the Northwest Territories, around 300km northeast of Yellowknife. There are currently two mines in production, with another three expected to open by 2007.

Between 1998 and 2002, 13.8 million carats of diamonds (a carat weighs 200mg) were extracted from the Canadian mines. Some experts believe that Canada could be producing up to half of the world’s diamonds within the next 10 or 15 years.

You might think that most diamonds come from South Africa, but they are actually found in around 25 different countries. The biggest producer is Botswana, accounting for about a quarter of production in terms of value. Russia comes next, with some 22 per cent, while South Africa contributes about 14 per cent by value. Canada now produces 15%.

Diamonds are formed deep within the Earth, under conditions of immense heat and pressure. They are pushed up towards the surface in molten rock called volcanic pipes. Most diamonds are unsuitable as gemstones – they are either too small or are flawed. These are used in industry for a variety of purposes, often in cutting or grinding machinery, making use of the diamond’s exceptional hardness. Diamonds can also be made synthetically, either by using high pressure equipment, or by reacting gases together in a microwave oven.