News from All Diamond

Plush toymaker Gund has an extensive line of stuffed toys for all budgets. However, the most sought-after toy at the Gund booth at the American International Toy Fair in New York Valentine's Day was the $10,000 Snuffles bear. If Tahitian black pearls for eyes and white alpaca fur weren't enough, Snuffles also sports a necklace featuring 10 carats of diamonds on a white gold chain with the company's famed motto, 'Gotta Getta Gund'. Although this bear is the most expensive bear to date which features diamonds, it is far from the most expensive price ever paid for a teddy bear. That prize goes to the Steiff's Louis Vuitton bear, which sold for a whopping $2.1 million at an auction in 2000. 

 Ross was born in 1916 to a Jewish family in Lynn. Over the years, Ross understood the importance of innovation and evolution. He slowly pushed the jewelry chain stores offerings to higher level, all the while insisting on lower margins to maintain a competitive edge.

Although diamonds have a natural beauty, Marcel is the man who figured out how to get the most light to shine out of a diamond, calculating how to maximize light return. 

Abraham 'Bram' Fischler was honored numerous times throughout his life for his many achievements, but more than anything, he should be credited for his pivotal role in establishing the Kimberly Process, a United Nations backed effort to limit trade in rough diamonds to countries that adhere to strict controls and by doing so to prevent diamonds from being used to help finance civil wars. 

 In a massive and resource-rich country like Canada, diamonds are a relatively small component of overall natural resource exports. Canada is a major exporter of gold, nickel, uranium, and forestry products and, perhaps surprisingly, possesses the world's second-largest oil reserves in the country's western part. In 2015, Canada exported $231 billion in natural resources. Diamond exports were $2.4 billion, just one percent of resource exports. However, diamonds have been located in some of the most northern and often inhospitable locations in this vast country. So while the impact of diamonds on the economy as a whole has been relatively small, they have been critical to the sustainable development of many northern settlements. These small towns and villages suffer from harsh weather and a lack of employment opportunities, so diamonds have been instrumental in their success in the last 15 years.

Diamonds were first discovered in Canada in 1991 in an area that few people believed could possess kimberlite intrusions. The Ekati mine, which is still in operation today, began mining in 1998. The following year, a massive gold mine called the 'Giant mine' closed after more than fifty years of mining. This was a major blow to the mining-heavy economy of the region, and diamond mining helped save the capital city of Yellowknife, in the Northwest Territories. In Canada, roughly 87 percent of the population of 36 million people live and work within 160 km of the US border. That makes Yellowknife, located about 2,000 km north of the US border, very remote, to say the least. The Northwest Territories, where much of the diamond activity in Canada is centered, has a population of just 44,000 people in an area of 1.34 million square kilometers. Diamonds have been a major source of employment and tax revenues for this area, which are desperate to benefit from their resource base.

Canada's attempts to develop its own cutting and polishing industry have had mixed, but mostly disappointing, results. In Canada, the provincial or territorial governments have much autonomy to establish the laws and guidelines within their jurisdiction. This had led to different rules within the three different provinces currently mining diamonds, and has created competing interests for the downstream diamond manufacturers in the country. However, in two of the three provinces where diamond mining takes place, the local governments mandate that mining companies sell up to 10 percent of the mined diamonds by value to local manufacturing companies, assuming that such demand actually exists. In reality, the demand has been far less than 10 percent, and the local cutting industry has not really gotten off the ground in more than 15 years.

In the early days of diamonds in Canada, many companies rushed to take advantage of the opportunity. In Yellowknife, a small compound was developed, and aptly named 'Diamond Row,' a stretch of buildings located next to the city's airport. Some big players entered the area with much promise, including Tiffany & Co.'s rough diamond polishing company Laurelton. However, it soon became evident that proximity to the diamonds was not a sustainable competitive advantage. In Northern Canada, the remote location makes the delivery of most products and services very expensive. This means that the cost of just about everything, including wages, is very high, making everything from the cost of building a factory to day-to-day operations high-cost and non-competitive.

For many years, local and federal governments were willing to subsidize factories that were losing money in order to keep the industry alive. However, this proved unsustainable, and many factories closed immediately after subsidies were revoked. This included many high profile manufacturers such as Tiffany and Arslanian Frères. While diamonds were available in large quantities to the local industry, it did not get any sort of discount on the rough price, and miners had their own internal market prices that local cutters had to pay. Despite the plentiful access to rough diamonds, manufacturing costs in Canada were on average more than eight times that of India.

'Diamond Row' has become an uneasy symbol of the policy failure to develop a cutting industry in Canada. Although some factories remain open, most have closed, and many have changed hands several times. Crossworks Manufacturing, a company owned by the HRA Group, has been a success story of late, with three manufacturing facilities in operation across the country. Their latest factory was built in the province of Ontario, to take advantage of diamonds coming out of the De Beers Victor mine.

Critics also point out that the cutting industry, both past and present, did not create the jobs for Canadian workers that were initially promised. Citing a lack of trained local workers, many firms brought in outside cutters from Albania and Vietnam. Generous foreign worker regulations in Canada allowed this to continue indefinitely, and local workers were largely left out of the opportunity. In one case, Albanian workers were given a generous stipend to be used to purchase winter clothing and outerwear for the harsh northern winter. Since it was summer at the time, many workers sent the money back home to their families, only to be vastly unprepared for the winter when it arrived.

Perhaps the saving grace for the cutting industry has been the branding of Canadian diamonds. Several different brands are sold in the country, and marketed as mined, cut, and polished in Canada. Canadians are a very nationalistic people, and these diamonds have sold successfully, despite the higher cost than foreign-made alternatives. For marketing purposes, retailers are able to leverage the environmental record of Canadian mines, the living wages paid to its workers, and the generally 'clean' perception of the diamond industry in the nation. This has helped a small number of factories to carve out a niche for themselves, and the industry sustains itself to this day.

Brands like 'Fire and Ice,' 'Glacier Fire,' 'Ice White Diamonds,' 'Canada Goose,' and 'Canada Pride' have resonated well with Canadian consumers. The government has also implemented a voluntary code of conduct that ensures producers can track the chain of custody of diamonds under their brand. This gives consumers the ability to ensure that they are buying a Canadian diamond.

Beneficiation in Canada has taught the world some valuable lessons. A cutting industry cannot be forced to exist, but rather must develop for a viable business reason or strategy. Proximity to the resource and the guarantee of consistent supply is very important, but may not ultimately be enough for an industry to thrive when other costs pressures exist. In Canada, the branding strategy has certainly worked to carve out a niche with Canadian consumers. The next step for them is to see these brands expand to the rest of the world.

Despite some of the setbacks, it still must be said that diamond mining in Canada has brought enormous opportunities to disadvantaged regions, and tax revenues continue to support governments at all levels. According to the Kimberley Process, Canada exported nearly $1.4 billion worth of rough diamonds in 2016. With a 10 percent royalty, diamond mining generates over 100 million dollars for the country every year. Since mining began in Canada, more than 10 billion dollars have been invested to develop and operate four diamond mines. Two new long-life mines have recently opened, and many more are in the early stages of development. The diamond story in Canada has yet to be written, and perhaps policy makers can learn from the successes and failures of the previous years.