Karelian Diamond Resources Moves Closer to Developing EU’s First Diamond Mine

Ireland-based Karelian Diamond Resources has taken a significant step towards establishing the European Union’s first diamond mine in the Kuopio-Kaavi region of eastern Finland. 

The Lahtojoki diamond deposit, known for its percentage of pink and colourless gem diamonds, has been the subject of legal and procedural delays, but a recent Finnish Land Court decision brings the project closer to realisation.

Court Ruling Resolves Land Dispute

The development of the Lahtojoki mine has been contingent on settling disputes with local landowners over compensation and boundary adjustments. Following appeals from two landowners, the Finnish Land Court upheld the original decision, which had been facilitated by the National Land Survey of Finland. The court maintained the established mine boundaries and largely rejected claims for increased compensation, though three issues were referred back for review by the National Land Survey.

Karelian Diamond Resources had previously paid €162,815 in rental compensation for the land, as mandated by the National Land Survey, and this latest ruling addresses an important requirement for the project. The company has called the finalisation of mine boundaries “an essential step” towards moving forward with the deposit’s development.

Potential of the Lahtojoki Diamond Deposit

The Lahtojoki deposit, according to Karelian Diamond Resources, contains an estimated 2.25 million carats of diamonds, including highly valuable pink and colourless diamonds. The company has highlighted the presence of pink diamonds, which typically have higher market values than traditional colourless diamonds, offering potential for significant profitability.

Karelian’s Preliminary Economic Assessment (PEA) in 2017 estimated that the deposit had a value of $225 million, with a net present value (NPV) of $39 million and a mine life of approximately nine years. The low strip ratio suggests that open-pit mining could be viable for the deposit.

Broader Industry Impact

Should the Lahtojoki mine proceed to production, it would mark the first diamond mine within the EU, which could affect the European diamond supply chain. The development may encourage further exploration and investment in diamond projects within Europe, potentially reducing reliance on external sources for gem-quality diamonds. The presence of pink diamonds in the region may also influence demand for high-value coloured diamonds in Europe.

Moreover, the Kuopio-Kaavi area could see significant economic benefits from the mine, including job creation and local investment. As Karelian Diamond Resources stated, “The development of a diamond mine at Lahtojoki will not only bring significant benefits to the company but also to the entire surrounding Kuopio-Kaavi area.”