10% of Victor’s Production to be Manufactured in Ontario (Updated)

Ontario’s Ministry of Northern Development and Mines announced Friday an agreement with De Beers Canada to expand the province’s diamond industry. The agreement stipulates that 10 percent the production at De Beers’ Victor Mine will be “made available for activities such as cutting and polishing in Ontario.”

The government of Ontario said in a release that De Beers’ Diamond Trading Company (DTC) will be offering an estimated C$25 million (US$24.5 million) worth of rough stones per year to certain Sightholders. The release also stated that the Sightholders will be chosen by means of an “international competition” and will be expected to set up processing operations in Ontario.

The goods will be supplied in London to government-accredited Sightholders for manufacturing in Ontario. Sightholders interested in acquiring the goods will need to apply specifically and will be chosen based on their ability to meet Ontario's beneficiation requirements as well as DTC's efficient distribution capabilities.

There are currently three Canadian Sightholders, recently selected for the 2008-2011 contract period: Arslanian Cutting Works NWT Ltd, Laurelton Diamonds Inc and Sundiamond HRA.

Northern Development and Mines Minister Michael Gravelle will promote investment in Ontario at a meeting of potential Sightholders in London July 7, during the July Sight, the statement notes. Also during the Sight, Sightholders will have a chance to hear a briefing on the application and view an “indicative” ‘Ontario’ Box.

“This agreement opens the door to a vibrant Ontario diamond cluster that could one day include diamond trading, jewelry manufacturing, marketing, tourism and other activities,” Gravelle commented.

Jim Gowans, president and CEO of De Beers Canada said that, “De Beers Canada’s investment will create a C$6.7 billion (US$6.57 billion) in GDP economic impact, contributing to sustainable growth in the First Nation communities of James Bay, Northeastern Ontario and Ontario.”

The Victor Mine is expected to generate more than 400 full-time production jobs and approximately 600,000 carats of diamonds a year during its 12-year lifespan, according to the ministry. James Bay Aboriginal communities have already benefited from construction jobs, direct payments, training programs, infrastructure and more than C$175 million (US$171.57 million) in joint ventures.

(Last updated July 7, 2008 at 10:18 am)