|Deloitte Restructuring Inc. is to be hired to oversee the process under the Companies’ Creditors Arrangement Act to realign its business and financial affairs. Stornoway’s common shares and convertible debentures will soon be delisted from trading on the Toronto Stock Exchange and will be worthless, |
Why, one may wonder, as this was supposed to be the nicest thing happening to the economy?
Still, there are reasons why Canadian diamond mines keep getting built — and in some cases it has little to do with economics. For De Beers, which has developed three mines there, Canada reduces its dependence on Botswana, where most of its diamonds are mined.
Aggarwal, who was involved in developing what became known as the “CanadaMark” brand to capitalize on the country’s clean image, says there’s potential for more to be done with that.
“Consumers in the U.S. and Canada have positive associations with Canadian diamonds,” he said. “There’s an opportunity with origin. It’s a tool that the miners can use to enhance the value of their diamonds.”
But the track record there hasn’t been good either. Canada tried to create a polishing industry in the Northwest Territories, capitalizing on the backlash against “conflict” diamonds. “Made in Canada” diamonds seemed an easy sell: ethically produced, mined from ice, cut, polished, and laser-etched with a tiny polar bear. Today, the polishing industry is all but gone and attempts by Dominion to revive the CanadaMark have met with mixed success.
There’s no getting around the higher costs of operating in Canada’s frozen tundra. Everything — labour, fuel and construction — costs more in the remote north.
“You look at these diamond mines, you’ve got your own road, your own airstrip, your own power grids,” said Tom Hoefer, executive director of the NWT & Nunavut Chamber of Mines. “That may be okay if you’ve got a world class deposit, but not everybody is mining world class assets.”