Ontario diamonds make their way around the world

"If you think platinum or gold is secret. It doesn't hold a candlelight to diamonds," says a smiling Ron Gashinski, a retired geologist who was involved in the establishment of a controversial diamond royalty in Ontario.

"No one touches the diamonds. Not even the people cleaning them. They have to put their hands in a glove box," says Gashinski, who lives in Ontario. "The daily production is in a thermos, about the size of a Tim Hortons coffee, and a guy with gloves hits a keypad so a door opens, and this arm puts the diamonds into a vault."

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• Diamond cutting takes tenuous hold in Sudbury, Ont.

• A mug full of diamonds: A reporter's notebook from the Victor Mine

Ontario's only diamond mine, north of Attiwapiskat, is part of the high stakes, secret world of diamonds.

From the way the stones are stored, valued, and shipped around the world, the De Beers Victor mine is a piece of an intricate global puzzle. Everything is precise, and hyper-calculated.

Cash in the bank

"There are no accidents," Gashinski says. "It is a strange business. A cash business. Before anyone can buy those diamonds from De Beers, they have to put cash in the bank. There are no lines of credit. It's a built in 'I trust you when the money is in the bank, up until then these are my diamonds.'"

The remote, fly-in-only Victor mine is in the James Bay lowlands, 1,100 km due north of Toronto. The open pit is less than a kilometre wide, considered small, but it is a geological wonder, blessed with near-perfect gemstones.

Gashinski got to know those diamonds well, logging thousands of air miles to follow the stones from Ontario's Far North to the U.K., every five weeks.

The Ontario government has a meticulous system to value the diamonds to try to ensure it recoups royalties, and ensure that 10 per cent make the return journey home, for polishing at the Crossworks facility in Sudbury, Ont.

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"You make a wrong move and it can cost the province hundreds of millions of dollars," Gashinski says.

Listening to the mild-mannered geologist talk about the diamond business is like having a front row seat at an action thriller.

What's a diamond worth?

The treks to the mine included Gashinski, then chief gemologist, another bureaucrat, and a hired gun, one of the few experts who knows the trading price for rough diamonds.

"This is so propriety that only a dozen people, max, in the world have this electronic price book for diamonds," Gashinski says.

"With copper, lead, zinc, gold, barley, oats, you can find the prices twice a day on the London Metal Exchange. There is no place at all in the world to get a publicly listed value of diamonds in rough state," hesays.

Security at the mine is tight. The trio had to use their fingerprints as ID in order to get close to the diamonds. One by one, they walked through a double set of air-locked glass doors, just wide enough for one person. Each door would seal shut before the other opened.

Eventually, they would meet the team from De Beers in the diamond room and begin the task of putting a value on stones before they could leave Canada. Taking up to two days, they studied the crystals on gridded paper, sometimes leaving the building to privately discuss what they were seeing.

Hyper security

"Not only was De Beers paranoid. So were we! There were probably 20 or 30 cameras focused on our hands," laughs Gashinski. Even the sample cutoff was questioned. It was done automatically by computer, but Gashinski recalls: "We always said to De Beers well, that's nice, but who did the programming for the computer? You have the source code. We don't. You get into those nit-picky discussions."

Every move is planned. Offensively and defensively.- RonGashinski, diamond expert

He says he'll never forget the drama that played out on his first evaluation. The diamonds are always weighed before and after. On this visit, they didn't weigh the same.

"Now I knew I didn't take any of them. And I knew my colleague didn't take any. But having all these cameras on you I found myself, just sweating. We turned everything upside down, on the floor, on the table. A lot of places will have a special designed carpet where the diamond bounces but only once. It doesn't bounce forever or slide on a tile. Eventually we stripped apart this machine weighing the diamonds, and inside, caught between the foam rubber, were three small little diamonds. What a relief to find them!"

Gashinski also followed the stones to England to claim the province's 10 per cent for polishing. He would make notes of all the physical characteristics and weigh them. He and his colleague were the ones who opened the parcel when it arrived back in Ontario.

"We had painstakingly tracked what we saw in London. We had to make sure that what we got here was exactly the same to the 0.3 per cent on the whole shipment. When we did that, then we released the diamonds to the Sudbury factory to cut."

Gashinski says he's proud of the work he did, and the work the government continues to do.

He says the government started out knowing "zilch" about the diamond business, and "as we gained expertise, we also gained confidence. A backbone. You are taking on a 100-year-old plus dominant world player in diamonds," he says, noting that De Beers is a formidable player.

"Every move is planned. Offensively and defensively. When you go into the corners you know there is an elbow somewhere by someone," he says.

"We lucked out. We lucked out with having the best diamonds from Mother Nature and we got a producer who at the end of the day was an excellent corporate citizen for Ontario."