December 6, 2018
The GNWT today announced changes to the Diamond Policy Framework. Here's some background info.
Beneficiation vs Allocation
The Government of the Northwest Territories has amended its Diamond Policy Framework to take a new approach to realizing economic benefits from diamond manufacturing.
The policy now provides the opportunity for manufacturers to export a portion of their NWT rough diamonds in exchange for alternative investments in the NWT economy.
It will, for example, enable Approved NWT Diamond Manufacturers to sustain manufacturing operations in the NWT by cutting and polishing higher quality rough in Yellowknife while exporting a portion to lower cost manufacturing centers. (It could also allow manufacturers to focus their NWT operations on high value high-skill diamond planning and lasering and exporting their stones for finishing.)
For the opportunity to export a portion of their stones, manufacturers will need to show proven invest in other areas of the economy like jewellery manufacturing, retail outlets, tourism partnerships and other related endeavours.
The change in policy expands the understanding of economic benefits from diamond manufacturing to include population growth, jobs and skill development in all sectors.
Manufacturers will need to provide, and get approval for, business plan that meet the GNWT’s investment requirements.
The GNWT recognizes that the NWT is an expensive jurisdiction in which to operate a manufacturing facility. Despite these costs, manufacturers continue to show interest in manufacturing opportunities driven, in large part by the availability access to mined-in-the-NWT rough diamonds.
The potential value of NWT rough diamonds available to NWT manufacturers is estimated at $150 million/year. This change to the Diamond Policy Framework is designed to realize more of this potential in real investment, development and diversification for the NWT economy.
It is one of the many ways that the GNWT is working to ensure that the NWT and its residents are benefiting from diamond mining.
Related: Q+A: Diamond Policy Framework Changes — What Does It Mean For The NWT?
The Diamond Policy Framework: What is it?
- The Diamond Policy Framework (the Framework) is the GNWT’s approach to encouraging and managing a secondary diamond industry in the NWT.
- This includes manufacturing and other value-add activities which could be realized from diamond production.
- It sets out the process and requirements for a would-be manufacturer to become an Approved NWT Diamond Manufacturer (ANDM).
- NWT diamond producers support the Framework by making available 10% of their annual production for access by approved manufacturers.
- The Framework was first established in 1999 with the intent is to grow a secondary diamond manufacturing industry in the NWT and provide local employment.
Review of the Diamond Policy Framework
- The devolution of responsibility for land and natural resources in 2014 marked a fundamental change in how NWT residents are able to benefit from resource development and allowed the GNWT to take a wider view of diamond manufacturing.
- The GNWT has completed a review of its Diamond Policy Framework with a view to making local industry more viable.
- The Review was completed with input from subject matter experts, representatives of the diamond manufacturing industry both in the NWT and elsewhere, and with the contracted help of the Constell Group, an international consultancy firm.
- This review identified a number of ways to encourage investment and development through policy changes without direct investments from the GNWT.