New Rules Could Mean Good Things for Diamond Mining in Northern Canada
In an effort to breathe life into the N.W.T.’s dormant diamond manufacturing industry, the territorial government will now allow diamond polishers that set up shop in the territory to export a share of their diamonds south for manufacturing.
The Department of Industry, Tourism and Investment made the announcement Thursday, December 6th.
For the past 19 years, the Northwest Territories have been trying to cultivate a diamond polishing industry with little to no success.
The previous rules required approved Northwest Territories diamond manufactures to cut and polish 100 percent of their N.W.T. diamonds in the territory. These companies had first dibs on 10 percent of the diamonds produced in the territory - a value of $150 million US annually.
As of right now there are two companies (Almod and Crossworks) approved to manufacture N.W.T. diamonds. Neither of which are manufacturing rough diamonds made available to them from N.W.T. mines.
The government believes this is due to the fact that the territory is the most expensive jurisdiction in the world to manufacture diamonds. For instance, it costs approximately $300 per carat to manufacture diamonds in the N.W.T., while that price falls as low as $80 per carat in a country like Namibia.
Qualifying for this new program involves an assessment derived of complex metrics that will gauge how much money these companies invest in the N.W.T., including employment numbers and capital costs. Based on that score, companies will be able to export between 70 and 90 percent of N.W.T. diamonds
Based on the matrix provided by the territorial government, the minimum amount a manufacturer would have to do in order to qualify for expiration 70 percent of their share N.W.T. diamonds would be employ one person in the diamond industry, spend $250,000 in capital expenditures, $250,000 on diverse investment, and $1 million in operating expenses.
Doing so would result in a core of 30 out of 100 points, the minimum required to order to qualify. A score of 95 points is required in order to export the maximum 90 percent of their share of N.W.T. diamonds.