Luxury retailer Tiffany & Co. is constructing a new building in Yellowknife that will house Tiffany's first diamond manufacturing plant. Tiffany has an agreement to buy rough diamonds from the Diavik mine and plans to cut a quarter of it at the $3 million, 12,000 square-foot Yellowknife facility.

Tiffany spokesman Mark Aaron says the company wants greater control over its product supply chain. Many see it as another sign of the change the diamond industry is going through - vertical integration.

In addition to the 10 year agreement signed in 1999 to buy at least $50 million a year of diamonds from Aber's share of production from Diavik, Tiffany is also part owner of the mine.

It owns 14.7 percent of Aber, which owns 40 percent of the Diavik project. Rio Tinto own 60 percent of the mine.