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QUEBEC, STORNOWAY TALK LOCAL DIAMOND PROCESSING SPINOFFS
Regina Leader-Post, Canada
Nov 6 2013
By Nicolas Van Praet, Financial Post November 5, 2013
MONTREAL - In a small office in downtown Montreal, a band of
Armenian-raised gem cutters is chomping at the bit to get their hands
on Quebec-made diamonds.
Whether they get their way depends on how hard the Parti Quebecois
government pushes for a Quebec-based secondary sector spun off from
mining - and how much the miners push back. It's a situation that
highlights a familiar predicament in Canada: We're really good at
pulling commodities from the ground. But processing them here is
often a complex negotiation that ends in failure.
Melisende Diamonds Ltd. is a six-person diamond polishing crew
operating on Montreal's precious-metal row on Cathcart Street. They
were part of a group of about 60 Armenians who settled in Yellowknife
when the government of the NorthWest Territories hatched the
territory's diamond processing industry by mandating the two diamond
producers active there to set aside 10% of their output for local
cutting and polishing.
Related
The effort fizzled out. Of four diamond processing plants started
in Yellowknife, only one is still operating. And so the Melisende
workers came to Montreal.
Right now, the Montreal operation buys most of its rough diamonds from
Africa, which it then polishes here for resale. But it hopes Quebec
will negotiate a deal with Stornoway Diamond Corp. that would force
the Montreal-based company to save a portion of its planned output
for local industry.
Reserving just 10% of Stornoway's production volume would create 100
jobs for cutters and polishers alone, said Melisende president Harry
Ohanessian. He said Melisende is willing to teach Quebecers how to
cut diamonds to create a local cutting base.
"We're all waiting for this," Mr. Ohanessian said in an interview
Tuesday, adding the key element of any agreement is asking Stornoway
to provide bigger and higher-grade diamonds, not just lower-quality
smaller stones. He argues the NWT's processing effort was crippled
by the lower-calibre of diamonds being provided to the cutters by
the mines, which wasn't good enough to make up for higher operating
costs in Yellowknife.
Negotiations between the Quebec government and Stornoway continue and
"all options" are on the table including mandating a dedicated volume
for local processors, Quebec Natural Resources Minister Martine Ouellet
told reporters at Stornoway's head office Tuesday. "Our desire is to
create jobs in Quebec. So now we're at the stage of examining which
stage of processing has the most opportunity for job creation."
Stornoway management has been cool generally to the idea of trying
to create local diamond polishing centres in Canada, saying the
cost-sensitive business has not been shown to be viable in high-wage
economies. Much of the world's diamond cutting is done in developing
countries such as India, where pay is typically several times less
than in North America. Ontario has a polishing operation fuelled by
dedicated output from De Beers' Victor mine in northeastern Ontario,
but it is small and staffed with foreign workers.
The value-added created by Renard's diamond output doesn't necessarily
lie in diamond polishing, said Stornoway CEO Matt Manson. It could
also be generated by starting an industry around jewellery design
and branding.
"Our ethos is to make sure there's as much wealth creation [from
our mine] as possible... But the most important thing for us [as a
miner] is to sell the diamonds into a free market to maximize price,"
Mr. Manson said. "That means selling them through the existing rough
diamond market in Antwerp, Belgium to the maximum bidder."
Stornoway's Renard diamond project in northern Quebec will mine 16
million carats a year worth $4-billion over an initial 11-year mine
life, according to company projections. The miner is in talks with
lenders and potential equity investors for the $800-million it needs
to build the operation.
http://www.leaderpost.com/business/fp/Quebec+Stornoway+talk+local+diamond+processing+spi noffs/9129060/story.html
Regina Leader-Post, Canada
Nov 6 2013
By Nicolas Van Praet, Financial Post November 5, 2013
MONTREAL - In a small office in downtown Montreal, a band of
Armenian-raised gem cutters is chomping at the bit to get their hands
on Quebec-made diamonds.
Whether they get their way depends on how hard the Parti Quebecois
government pushes for a Quebec-based secondary sector spun off from
mining - and how much the miners push back. It's a situation that
highlights a familiar predicament in Canada: We're really good at
pulling commodities from the ground. But processing them here is
often a complex negotiation that ends in failure.
Melisende Diamonds Ltd. is a six-person diamond polishing crew
operating on Montreal's precious-metal row on Cathcart Street. They
were part of a group of about 60 Armenians who settled in Yellowknife
when the government of the NorthWest Territories hatched the
territory's diamond processing industry by mandating the two diamond
producers active there to set aside 10% of their output for local
cutting and polishing.
Related
The effort fizzled out. Of four diamond processing plants started
in Yellowknife, only one is still operating. And so the Melisende
workers came to Montreal.
Right now, the Montreal operation buys most of its rough diamonds from
Africa, which it then polishes here for resale. But it hopes Quebec
will negotiate a deal with Stornoway Diamond Corp. that would force
the Montreal-based company to save a portion of its planned output
for local industry.
Reserving just 10% of Stornoway's production volume would create 100
jobs for cutters and polishers alone, said Melisende president Harry
Ohanessian. He said Melisende is willing to teach Quebecers how to
cut diamonds to create a local cutting base.
"We're all waiting for this," Mr. Ohanessian said in an interview
Tuesday, adding the key element of any agreement is asking Stornoway
to provide bigger and higher-grade diamonds, not just lower-quality
smaller stones. He argues the NWT's processing effort was crippled
by the lower-calibre of diamonds being provided to the cutters by
the mines, which wasn't good enough to make up for higher operating
costs in Yellowknife.
Negotiations between the Quebec government and Stornoway continue and
"all options" are on the table including mandating a dedicated volume
for local processors, Quebec Natural Resources Minister Martine Ouellet
told reporters at Stornoway's head office Tuesday. "Our desire is to
create jobs in Quebec. So now we're at the stage of examining which
stage of processing has the most opportunity for job creation."
Stornoway management has been cool generally to the idea of trying
to create local diamond polishing centres in Canada, saying the
cost-sensitive business has not been shown to be viable in high-wage
economies. Much of the world's diamond cutting is done in developing
countries such as India, where pay is typically several times less
than in North America. Ontario has a polishing operation fuelled by
dedicated output from De Beers' Victor mine in northeastern Ontario,
but it is small and staffed with foreign workers.
The value-added created by Renard's diamond output doesn't necessarily
lie in diamond polishing, said Stornoway CEO Matt Manson. It could
also be generated by starting an industry around jewellery design
and branding.
"Our ethos is to make sure there's as much wealth creation [from
our mine] as possible... But the most important thing for us [as a
miner] is to sell the diamonds into a free market to maximize price,"
Mr. Manson said. "That means selling them through the existing rough
diamond market in Antwerp, Belgium to the maximum bidder."
Stornoway's Renard diamond project in northern Quebec will mine 16
million carats a year worth $4-billion over an initial 11-year mine
life, according to company projections. The miner is in talks with
lenders and potential equity investors for the $800-million it needs
to build the operation.
http://www.leaderpost.com/business/fp/Quebec+Stornoway+talk+local+diamond+processing+spi noffs/9129060/story.html