Canada’s NWT Hopeful on Polishing Future Despite Sirius Closure

Canada’s Northwest Territories’ diamond polishing industry still has a viable future despite the closure of Sirius Diamonds this week, according to the territory's Finance Minister Floyd Roland.

Sirius, which went into receivership on Tuesday after failing to reach a new financing agreement with the NWT government, failed mostly because of industry growing pains, Floyd said.

The territory’s government wasn't convinced Sirius, one of the largest polishing firms in the NWT would be able to pay off an C$8 million ($6.1 million) loan it had extended to the firm.

Roland remains optimistic, however, about the future of the industry in the territory.

"We continue to be interested, there's still a bright future for diamonds in the Northwest Territories," he said.

"As with any new developments that happen (…) I mean it was new for Canada, never mind the Northwest Territories - I think we can look at any new industry and there's some rough times to start with."

Roland says that three other polishing plants will continue to operate in Yellowknife.

He says the territorial government has already heard from potential buyers of the Sirius plant.

The NWT government in June forced two Yellowknife diamond-cutters forced into receivership - Sirius and Arslanian - due to bank loans totaling C$17.2 million ($12.6) that were backed by the NWT.

The government agreed, however, to provide loan guarantees for a subsidiary of Montreal-based Basal Diamonds just two weeks after forcing it into receivership.