N.W.T. gov't loosening rules in hopes of wooing Northern diamond manufacturers
2 companies are approved N.W.T. diamond manufacturers; neither of them take advantage of this distinction
In an effort to breathe life into the N.W.T.'s dormant diamond manufacturing industry, the territorial government will allow diamond polishers that set up shop in the territory to export a share of their diamonds south for manufacturing.
This offer comes in exchange with other investments in the Northwest Territories.
The Department of Industry, Tourism and Investment made the announcement Thursday afternoon.
As it stands right now, the Northwest Territories has been trying to cultivate a diamond polishing industry in the Northwest Territories for 19 years, with little to no success.
The previous rules required approved Northwest Territories diamond manufacturers to cut and polish 100 per cent of their N.W.T. diamonds in the territory. These companies had first dibs on 10 per cent of the diamonds produced in the territory — a value of $150 million US annually.
2 companies approved
Right now, two companies are approved to manufacture N.W.T. diamonds — Almod and Crossworks. Neither are manufacturing rough diamonds made available to them from N.W.T. mines.
The government believes this is because the territory is the the most expensive jurisdiction in the world to manufacture diamonds. For example, it costs about $300 per carat to manufacture diamonds in the N.W.T., while that price falls as low as $80 per carat in a country like Namibia.
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To qualify for this new program, diamond manufacturers will be assessed by a complex metric that will gauge how much money these companies invest in the N.W.T., including employment numbers and capital costs. Based on that score, companies will be able to export between 70 and 90 per cent of their share of N.W.T. diamonds.
Both Crossworks and Almod will need to submit business plans in order to qualify for the new program.
Based on the matrix provided by the territorial government, the minimum amount a manufacturer would have to do in order to qualify for exporting 70 per cent of their share of N.W.T. diamonds would be employee one person in the diamond industry, spend $250,000 on capital expenditures, $250,000 on diverse investment, and $1 million in operating expenses.
Doing so would result in a score of 30 out of 100 points, the minimum required in order to qualify. A score of 95 points is required in order to export the maximum 90 per cent of their share of N.W.T. diamonds.
With files from Randi Beers, Sidney Cohen