Snap Lake Diamond Mine operations will begin this summer and it is the first diamond mine in Canada and the first outside Africa to be owned by De Beers. Beginning in 2008, De Beers Canada has agreed to offer 10 percent of its Snap Lake diamonds to cutters and polishers in the Northwest Territories.
De Beers is expressing its support for the growing diamond cutting industry in northern Canada. It is likely that De Beers will be reserving the larger and more valuable rough diamonds for the local Canadian cutters while the bulk of the diamonds will be released to cutters in countries like India that have lower labor costs.
In keeping with De Beers’ policy of only selling diamonds to its exclusive list of sightholders, the Canadian cutters will be required to only sell diamond to clients who meet the criteria set by De Beers’ sales and marketing company, the Diamond Trading Company.
The start up of diamond mining operations at Snap Lake comes at the same time that De Beers is reducing its purchases of rough diamonds from Alrosa, the giant Russian diamond producer. Under pressure from the European Commission, De Beers has agreed to reduce purchases of Alrosa production by $100 million in 2007 and $100 million each subsequent year until purchases are zero in 2009.
In addition to Canada, De Beers has also pledged to provide rough diamonds to southern African countries so they can expand their involvement from mining into cutting and polishing and thus enjoy a bigger share of the economic wealth created by diamonds.
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