Canadian diamond producers meet to discuss the future

Canada and the world’s biggest diamond producers, including South Africa’s De Beers, on Wednesday ended their first major round-table on how to develop the country’s fledgling diamond industry, Reuters reports.

Canada’s Federal Resources Minister Herb Dhaliwal said in an interview the government would take recommendations from the meeting and develop an action plan for Canada’s emerging diamond wealth. The plan will be presented to a meeting of Canadian mines ministers in September.

The two-day meeting in Edmonton, Alberta, brought together federal and northern development ministers with large and small diamond stakeholders operating in Canada.

“We know there is a huge growth potential and we want to make sure that it grows in the proper direction,” he told Reuters, adding: “It is easier to do it now than 10 years from now.”

Diamonds were discovered in Canada’s Northwest Territories just over a decade ago and Canada’s first mine, Ekati, was opened in 1998 by BHP Billiton Plc. The mine produces about five million cts. annually.

A second mine, Diavik, began producing diamonds in February and is a joint venture between Rio Tinto Ltd and Aber Diamond Corp.

De Beers hopes to open the third mine, Snap Lake, in 2006 in the frozen barren lands of the Northwest Territories. The diamond giant is spending 30% of its $75.9 million global exploration budget in Canada this year in search of lucrative deposits.

Canada is expected to become one of the top five diamond producers within the next 15 years as more mines are built.

“It’s a new industry but it is a growing industry and we need to make sure that we can take advantage of the opportunities in the long term,” Dhaliwal reportedly said.

He said there was now more interest in exploring regions outside the Northwest Territories. New promising diamond finds have been made recently in the northern Nunavut territory, also in Quebec, Alberta, Saskatchewan, and Ontario.

Canada is keen to promote its reputation as a peaceful nation and is stressing that its diamonds are mined under ethical conditions, that sets it aside from so-called “conflict diamonds” that are used fund civil wars in Africa.

Issues raised in the meeting included security, labor development, and marketing of rough and polished stones, Dhaliwal reportedly said. There were also discussions about the removal of a 10% excise tax on jewelry and the continuation of a tax credit on exploration to encourage companies.

The development of a secondary industry—diamond cutting and polishing—and skills training was also reportedly raised.