De Beers does diamonds deal with NWT gov’t

De Beers Canada says it will make 10% of its diamonds from the Gahcho Ku project in the Northwest Territories for sale to approved manufacturers who have met the criteria set by the Diamond Trading Co. (DTC), the sales and marketing arm of De Beers.

The manufacturers must be approved by the government of the Northwest Territories, and the 10% of Gahcho Ku production is determined by value, in “economically cuttable” categories.

These Gahcho Ku diamonds will be certified as diamonds mined, cut and polished in the N.W.T. De Beers will provide training in diamond sorting for N.W.T. residents.

The agreement builds on earlier, similar arrangements for De Beers Canada’s Snap Lake project diamonds, and gives manufacturers approved by the N.W.T. government equal access to Gahcho Ku or Snap Lake rough diamonds.

“This agreement provides further opportunities for local manufacturers to add value to, and derive benefit from, diamonds produced at the proposed Gahcho Ku mine, and is consistent with the agreement announced regarding Snap Lake diamonds earlier this year,” says De Beers Canada president and CEO, Jim Gowans.

De Beers will have a local sorting outfit in Yellowknife, the capital of the N.W.T., where its Snap Lake and Gahcho Ku diamonds will be valued separately for royalty purposes.

Snap Lake and Gahcho Ku diamonds will made ready for sale by the DTC in London.

To ensure the integrity of the valuation, the territorial government has the right to monitor the manufacturing and valuation process.

Approved manufacturers seeking rough diamonds from either of De Beers’ diamond projects must apply to become clients of the DTC. De Beers says applicants will be selected using “fair and objective” criteria.

Gahcho Ku is undergoing the environmental impact review process.

De Beers began permitting in November 2005, filing applications with the Mackenzie Valley Land and Water Board for land and water use licences to build and operate a mine at the project. The mine is expected to start up in 2011 and reach full production in 2012.