This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Ontario Mining Association Chairman George Flumerfelt is featured in the January 2009 issue of the Canadian Mining Journal.  “Keeping Pace With Reality” is the headline on his article in the magazine.  Mr. Flumerfelt, who is President of JS Redpath, took over as Chairman of the OMA in June 2008.

In the article, he catalogues some of the initiatives being carried out by the OMA to help its members get through the current rough patch and lay the groundwork for the foundations of future growth and development.  “There is no doubt the current downturn in prices has come upon us more suddenly that those of years past,” he said “Also, when coupled with the world credit crunch and all the talk of global recession, government bailouts of banks and formerly stable household name companies, the situation seems to be more serious this time.”

“Hopefully, with all the stimuli being applied by countries around the globe, the mining industry will start to recover before too long,” Mr. Flumerfelt added.  “One thing we do know for sure is that recovery will come as companies and individuals adjust to the current market realities.”  And on an optimistic note, he said “We need to remember that demand for mineral commodities will return and inevitably better pricing will  follow.  It is hard to believe that 2009 is going to be a great year but there is some hope for price recovery in 2010.”

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Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

The global diamond industry is suffering the same economic downturn as the rest of the world. Consumers who may be out of work or watching their investments shrink are in no mood to buy luxury goods. The result is falling diamond prices as demand shrinks.

Diamond prices have been under pressure for over a year. One Canadian producer has already bit the dust. Tahera Diamond Corp. closed its Jericho mine in Nunavut and filed for protection under the Companies’ Creditors Arrangement Act in January 2008. Its assets are for sale.

Even the largest diamond producer is feeling the pinch. Word has reached us from Diamond World Magazine of Mumbai, India, that De Beers Canada plans to suspend operations at its Snap Lake mine in the Northwest Territories for a total of 10 weeks this year. This is on top of the 105 contract workers that were laid off in November 2008. Remaining employees will be asked to take vacations or accept salary adjustments to cover a six-week closure this summer and a further four-week closure at the end of this year.

De Beers January sales of rough diamonds to selected customers was at a 25-year low. The January 2008 sales garnered $650 million, but this year’s offering drew only an estimated $80 million to $150 million. The drop is a reflection of the depth of economic woes in the United States, where consumers purchase 50% of the world’s diamonds.

I’ll do my part to support the diamond industry. I’m saving towards the purchase of a Canadian diamond. Too bad the federal budget didn’t offer a tax credit for buying Canadian luxury goods.