July 4, 2008

De Beers, Ontario Reach Diamond Deal

De Beers Canada, operator of the first diamond mine in Ontario, said Saturday 10 percent of its production will be available for processing in the province.

The commitment came in an agreement in principle between the provincial government and De Beers regarding the diamonds to be extracted at the company's Victor Mine, the company said in a news release.

De Beers' Diamond Trading Co. is expected to offer about $25 million worth of rough stones a year to a designated buyer or buyers, known as sightholders. The sightholders will be chosen through an international competition, and will be expected to set up processing operations in Ontario.

This agreement opens the door to a vibrant Ontario diamond cluster that could one day include diamond trading, jewelry manufacturing, marketing, tourism and other activities, said Northern Development and Mines Minister Michael Gravelle.

Jim Gowans, chief executive officer of De Beers Canada, said the company's investment will create $6.7 billion impact on gross domestic product.

The Victor Mine is expected to generate more than 400 full-time production jobs and about 600,000 carats of diamonds a year during its anticipated 12-year lifespan.