CANADA

The History of Diamond Production: Canada: Northern Lights

In a decade, maybe less, North America will be the world’s leading source of gem diamonds. History books will talk about Canada as a major source for this gem the way they now do South Africa and Russia.

As of the end of 2004, Canada was already producing 12.6 carats annually—making it sixth in volume; but with output valued at $1.7 billion, it was third in value. And preliminary reports indicated that production was up nearly 10% in 2005. Since commencing full-scale production in 1998, Canada has leapfrogged over other countries to now account for 16% of the world’s annual diamond production in dollar terms. Only Botswana, whose production was valued at $2.3 billion, and Russia, whose production was valued at just under $2 billion, were ahead of Canada. This is astonishing for a country whose diamond mining industry was then only six years old. What’s more, Canada only had two operational mines. By 2010, it is expected to have at least six.

Canada, like Botswana and Russia, is determined to develop a cutting industry to more fully capitalize on its diamond riches. So far, however, efforts to start a cutting industry have proved largely unsuccessful as low-wage cutting centers such as India, China and even Armenia continue to attract cost-conscious manufacturers.

Nevertheless, the attempt to create a thriving niche market for Canadian mined and manufactured diamonds may be the key to eventual success. Selling on the basis of origin has proven itself a viable branding strategy throughout diamond history. Indeed, when Brazil started producing diamonds in large quantities around 1730, cutters and jewelers dependent on India for stones used origin as a way to keep customers loyal. Now diamond brands such as the “Polar Bear” and “Maple Leaf” have demonstrated appeal to retailers intent on differentiating their diamonds from competitors’.