From a mining standpoint, Canada is the biggest news in diamonds since the discovery of Russia's tundra mines in the 1950s. And with annual mine output already at 11 million carats and soaring, it may eventually become as important a diamond source as South Africa in the late 19th and early 20th centuries.
But Canada is failing in its attempts to get added-value revenue from its diamond wealth by developing a cutting industry.
Two highly publicized cutting ventures in the North West Territories'
capital of Yellowknife, near the country's chief mines, have failed or are failing.
In August, Sirius Diamonds, the first and most publicized Canadian cutting operation, closed its doors because it could not repay a $6.13 million loan it owed the local government.
In January, Rosy Blue, possibly the world's largest diamond company, sold its interest in Yellowknife's other major cutting plant, Arslanian Cutting Works. That left the company strapped with more than $8 million in loans which it was having difficulty repaying. If the Arslanian factory goes bust, it will leave only two much smaller shops to eke out livings in the remotes of Canada.
That will doom cutting in Yellowknife.
But all is not lost. Diarough in Belgium is planning to open a 50-man cutting factory in Quebec in January 2005. The hope is that by moving farther east to large urban centers factories cutting branded Canadian diamonds can cut more efficiently and economically, increasing their chances of success.