Qubec: Why Limit Ourselves?

Last month saw the announcement of an action plan for the National Diamond Strategy. The intention is to use Canada’s natural endowment of diamonds to create sustainable revenues, jobs and taxes from the exploration and mining all the way downstream to the retail sales of cut stones.

The idea of a diamond strategy was born in July 2003, requested by the provincial and territorial premiers. The action plan that the steering committee came up with was unveiled to the public in late September 2004 by the natural resources ministers for Quebc (Honourable Sam Hamad) and the Northwest Territories (Honourable Brendan Bell), who are co-chairing the work.

Hamad and Quebec’s associate deputy minister for mines Jean-Louis Caty explained to CMJ what the strategy means to Canada and to Qubec.

“Canada now represents 12% of worldwide diamond production, which is around US$9 billion annually, so we are talking about US$1 billion in Canada,” says Hamad. “The Northwest Territories now has two mines and a third one will soon be in operation. Ontario has one diamond mine in development and Nunavut also has one. In Qubec we’re working very hard on exploration and I hope that we will have one or more mines in the future.”

Although there are many diamond exploration projects in the province, the important one to watch is the Ashton/ SOQUEM project in the Otish Mountains, according to Caty. Over seven years the team has detected ten diamond-bearing kimberlite pipes, which are being bulk-sampled. If the project succeeds it could be producing Quebec’s first diamonds, 10 years from now.

Hamad says that his colleagues in the House of Assembly are very interested in the diamonds being discovered in Qubec “because it’s one of our natural resources. The value for mining diamonds worldwide is US$9 billion per year, but the retail market for diamonds is US$60 billion, so diamonds could have a very interesting added value for our economy.”

Says Caty, “There are big profits at the front end, but there are profits all along, and jobs. Why limit ourselves to only the economic benefits from the mining–the jobs, taxation, all the rest of it–when we know that there is a full process from mining all the way to jewelry that could possibly be enhanced in the country. I’m not saying we’ll generate billions of dollars of benefits, but it’s worth looking into.” He adds, “It has to make business sense; otherwise it is not worth looking into.”

At the same time, Quebec is developing its own diamond strategy that covers the aspects under provincial jurisdiction, and it has already borne fruit. In June a global diamond processor based in Belgium, Diarough, announced its intention to build a US$14.5-million cutting and polishing facility in the community of Matane, 400 km east of Qubec City. The plant will employ close to 50 people within five years, producing more than 11,000 carats/year of high-value high-quality goods. The local CEGEP (community college) is already training people in cutting and polishing.

The two most important tactics needed to expand the diamond industry in Canada, according to Caty, are to remove the federal excise tax from diamonds (currently a disincentive to buying jewelry in Canada), and for governments to share knowledge and work together.