Crossworks was one of several diamond cutting and polishing companies bidding for the rights to cut and polish 10 per cent of De Beers’ rough diamond production from Victor as part of a local beneficiation deal worked out by De Beers and the Ontario Ministry of Northern Development and Mines. The 10 per cent cut equates to approximately $25 million worth of diamonds.
The company will initially import staff from its operation in Vancouver and experienced diamond polishers from its factory in Vietnam to ramp up and begin training local polishers.
Diamond polishing takes a considerable amount of skill, said Crossworks marketing director Dylan Dix. “If you bugger up a bolt, it’s a couple of bucks, but if you bugger up a two-carat diamond, it’s $20,000.”
The imported labour force will remain in Sudbury for the 12 to 18 months it will take to complete the training of local polishers.
Crossworks will purchase Victor diamonds from De Beers’ Diamond Trading Company, and sell them to retailers across North America, including the larger Canadian-owned jewellery chains.
The closure of several diamond polishing factories in Yellowknife, including the January shutdown of a Laurelton Diamonds polishing factory owned by Tiffany & Co., shouldn’t be interpreted as an omen for the viability of such enterprises in Canada, said Dix.
“We’ve been in Canada since 1982, so as a Canadian company, we have a vested interest in the logic behind local beneficiation. Other companies have gone up north to gain access to roughs (from diamond mines in the Northwest Territories) and now want to move elsewhere. The reason for our success is we want to build it here.”
The availability of skilled labour and the higher cost of operating in Canada aren’t issues for Crossworks, said Dix.
“We’ve been polishing diamonds in a factory on the 21st floor of an office tower in Vancouver for 10 years. It’s probably the most expensive rent in the city and we’ve been successful.”
The high quality of the Victor diamonds – said to be among the highest quality in the world – should contribute to the viability of the Sudbury operation as diamond miners, including De Beers, cut back production and postpone planned mine developments as a result of the current recession and a falloff in consumer spending.
“The average run of mine in the Northwest Territories is around $130 per carat. At the Victor Mine, it’s between $400 and $450 per carat, so the quality is spectacular,” said Dix. “De Beers’ Snap Lake Mine in the Northwest Territories took out 1.2 million carats in 2008. Victor produced about half of that, but they were the same in value.”
Crossworks, one of the founding members of the new Canadian Diamond Bourse, also plans to open a sales office in Toronto.
“The establishment of our factory is a great beginning for us in Ontario and will put Greater Sudbury on the global diamond map,” said Crossworks’ president, Uri Ariel. “As a Canadian company, we are excited about the possibilities that this offers the jewellery industry, the City of Sudbury, the province of Ontario and Canada.”