For 10 years, Charles Fipke chipped away at rocks strewn across some of the most desolate land in North America. His persistence paid off.

In October, the continent's first world-class diamond mine is scheduled to begin production on a tract of tundra and lakes in the remote heartland of Canada's Northwest Territories.The industrial complex is designed to operate every day for the next 25 years in harsh arctic weather, producing high-quality diamonds with a projected value of more than $7 billion.

Other mines are expected to open in the region over the next few years, and experts predict Canada will soon be producing more than 10 percent of the world's gem-quality diamonds.

Fipke, a geologist from British Columbia, wasn't the first prospector to hunt for diamonds in the Northwest Territories, but he was perhaps the most dogged. Starting in 1981, he followed the path of Ice Age glaciers across the sparsely populated region, looking for tiny mineral traces in the surface rocks that would signal the presence of diamond-bearing ore underneath. It took him a decade to find what he was looking for.

"Everybody thought he was a nut," said Mike Vaydik, general manager of the Northwest Territories Chamber of Mines. "But that one guy's singlemindness has started a whole new industry for Canada."

Fipke's prospecting company, Dia Met Minerals, entered into a partnership with Australia's Broken Hill Proprietary Co., one of the biggest mining companies in the world. BHP bought 51 percent of what is now known as the Ekati mine and is spending about $750 million to develop it.

It has been a complicated project, logistically and politically.

The site - 125 miles south of the Arctic Circle and 185 miles from the nearest supply sources in Yellowknife - is accessible only by air or by an ice road usable for about 12 weeks in mid-winter.

This winter, before the spring thaw began turning the area into an impenetrable maze of lakes, bogs and boulders, 2,100 truckloads of supplies moved over the ice road from Yellowknife, the territorial capital. The cargo included 15 million gallons of fuel - a year's supply for an operation that must keep running even during wintertime bouts of minus-40 temperatures.

Employees will work two solid weeks of 12-hour shifts, then fly out for two-week breaks. No alcohol is allowed at the mine, and employees will be subjected to body searches and surveillance-camera monitoring.

On the political front, Broken Hill has worked out accords with three Indian tribes and the territory's community of Inuit. The company is providing job training and scholarships to the native communities and has pledged to allocate about 30 percent of the mine's 600 permanent jobs to aboriginals.

Stephen Kakfwi, a former chief of the Dene tribe and now the territory's economic development minister, praised BHP as "a good corporate citizen" that has kept its promises on hiring and local purchasing of supplies.

The company also went through a 21/2-year environmental review that Vaydik, the Chamber of Mines official, described as the toughest ever for a Canadian mining project.

Some major environmental groups initially were hostile to the project, but criticism ebbed after Broken Hill detailed its conservation and reclamation plans. Key challenges include minimizing water pollution on a tract that contains 8,000 lakes and preserving a migration corridor for a herd of 450,000 caribou.

The diamonds are buried in cylinder-like deposits of volcanic rock called kimberlite, covered by shallow lakes that will be drained to create open-pit mines.

Initially, the mine will process 9,000 tons of ore a day to produce a quantity of diamonds that would fit in a can of coffee. The projected yearly output - roughly 4 million carats of diamonds - would earn $350 million and constitute about 4 percent of worldwide production.

Fipke's discovery triggered a two-year diamond rush in the Northwest Territories, one of the largest mineral-staking rushes ever in North America.

Another project close to fruition is the proposed Diavik mine, scheduled to begin production in 2001. It is close to the Ekati mine and is expected to earn comparable revenues for the Anglo-Australian operator, Rio Tinto Ltd., and its Canadian partners.

The diamond boom couldn't have come at a better time for the Northwest Territories, where the important gold industry and other mining sectors have been battered by falling prices.

One of the key unanswered questions for the Ekati mine is how Broken Hill will market its diamonds. The company is negotiating with De Beers, the world's No. 1 producer and marketer of diamonds, but BHP spokesman Graham Nicholls said Ekati's diamonds will be marketed through "multiple channels" that will bypass De Beers at least partially.