Northern Canada, the Conflict-Free Diamond Frontier – by Christopher F. Schuetze (New York Times – September 11, 2014)

http://www.nytimes.com/

The four C’s of a conventional diamond are color, clarity, cut and carat weight. Deepak Kumar is fond of saying that his stones will have six C’s. “The fifth C is for ‘conflict-free,’ and the sixth C is for ‘Canadian,”’ Mr. Kumar said in a telephone interview from Yellowknife — population 20,000 — the capital of Canada’s Northwest Territories.

Mr. Kumar’s company, Deepak International, announced this summer that it had bought two defunct diamond polishing plants in Yellowknife for 1.9 million Canadian dollars, or $1.7 million, together with the exclusive rights to the polar bear symbol, a quality logo for the Territories’ sustainably mined stones.

As consumers increasingly ask where their diamonds are sourced, polished and cut, Canadian diamonds have a reputational advantage. They are marketed as conflict-free and cleanly mined under the Canadian Diamond Code of Conduct, overseen by the federal government, that goes beyond the Kimberley Process certification program, established in 2003, which sets minimum standards for ethical diamond mining.

“Canada is a wonderful story. It is icy, it is clean, it is cold,” said Dylan Dix, an executive with HRA Group, Canada’s biggest diamond producer.

Industrial-scale diamond mining started in Canada in the 1990s — just as stories of war atrocities and exploitation began to roil the market for African gemstones. Canada has since become the world’s third-biggest diamond producer, after Botswana and Russia. It currently produces roughly 15 percent of all diamonds on the world market, from four mines, with two more major mining projects scheduled to open in the years to come.

To help market its rising output, the country’s diamond industry started in the 1990s to micro-engrave its stones with uniquely identifiable Canadian icons. Diamonds mined, cut and polished in the Northwest Territories — an expanse of the country that runs into its far north, and in which three of its active mines are located — were incised with a tiny polar bear symbol: Diamonds from the Victor mine, in the province of Ontario, were marked with a stylized trillium flower, Ontario’s emblem. All Canadian diamonds also carry a tracking number.

“Every country in the world that produces diamonds has to be impressed by how Canada has marketed their diamonds,” said Greg Merrall, an expert on Canadian jewelry and the head of the jewelry program at Georgian College in Barrie, Ontario.

Such marks of origin can raise the value of a stone, even though the gem itself may be effectively identical to diamonds found elsewhere in the world.

In practice, Canadian diamonds are “equivalent to something you find anywhere else,” although scientific analysis of trace impurities might help an expert to determine the origin of a specific stone, noted Simon Redfern, professor of earth sciences at Cambridge University.

“The amazing thing about diamonds is that the value put on them is pretty much artificial,” Professor Redfern said.

Continue reading the main storyContinue reading the main story
The polar bear logo of the Northwest Territories was intended not just to serve as a mark of quality for customers, but also as a guarantee of an elaborate benefaction process that returned at least some of the profits of mining to the Northwest Territories’ indigenous communities, Mr. Merrall said.

Yet, though the logo was popular with buyers, the polishers who were the original license holders went out of business and closed their workshops in 2010. It took a two-year search and a lengthy qualification process before the territorial government could announce, early last year, that it had found a buyer to bring the polar bear logo back to life, and another two years of paperwork and preparation to get the Yellowknife workshops ready for reopening by the end of this year.

For the rest of this article, click here: http://www.nytimes.com/2014/09/12/fashion/northern-canada-the-conflict-free-diamond-frontier.html?_r=0