So you want to buy a Canadian diamond?

I have been a cheerleader for Canadian diamonds every since I heard about the first mine being developed. My enthusiasm must have rubbed off, because both my mom and my aunt have become interested in buying a Canadian stone. On their behalf, and on yours, I have done some research into the matter.

There is still only one Canadian mine producing diamonds, BHP Billiton’s Ekati mine 300 km northeast of Yellowknife, but it will be joined early in 2003 by its near-neighbour, the Diavik mine, jointly-owned by a Rio Tinto subsidiary, Diavik Diamond Mines Inc. (60% interest) and Aber Diamonds Mines (40%).

All the stones from Ekati are sent to BHP Billiton’s subsidiary in Antwerp for sorting and grading. Then a portion of the rough stones, up to 10% by value, are returned to BHP Billiton in Yellowknife for sale to local cutters.

There are several diamond-cutting facilities in Canada, but the three in Yellowknife–Sirius, Arslanian and Deton-Cho–specialize in cutting stones mined in the Northwest Territories. (Deton-Cho is not currently operating.) In spring 2003, Tiffany will open a facility in Yellowknife to cut some of Diavik’s product.

By world standards, the Yellowknife cutters are small operators and can’t even keep up with the 10% of Ekati’s 5 million carats annual production, so most stones from the Ekati mine are cut outside of Canada. However, according to the Competition Bureau at Industry Canada, a Canadian diamond is a diamond that was mined in Canada, and can be proven so. It may or may not have been cut and polished in Canada.

Some of the Canadian stones now available are Sirius’ Polar Bear Diamond (a round brilliant cut) and the Sirius Ideal Princess (a square cut). Toronto-based Corona Jewelry Co. is marketing round and princess-cut Canadian stones under the name Loon, that are cut at Arslanian or Deton-Cho. BHP Billiton Diamonds itself is marketing Canadian stones under the name of the mine; the Ekati diamonds will be renamed Aurias next year. They are cut at Arslanian and in Israel.

How can you tell if a diamond is Canadian? Right now the best proof is if the stone is accompanied by one of two certificates. A BHP Billiton certificate guarantees that the stone came from the Ekati mine. The other proof is a GNWT (Government of Northwest Territories) certificate, which guarantees that the stone was mined, cut and polished in the Northwest Territories, and the cut is a minimum standard of HRD very good. The certificate number is laser-etched on the girdle of the stone. As long as the certificate appears to be genuine, the description on it matches the stone, and you feel you are dealing with a reputable jeweler, you can be confident you have the real goods.

Lower-quality Canadian-mined stones don’t have one of these two certificates. If a jeweler is telling you it’s a Canadian stone, ask to see the proof.

The tracking of a diamond is essentially an accounting procedure–a continuous paper trail from the mine through the seller and cutter to the retailer. But the current system is not as tight as it should be. To close the gaps, a voluntary Code of Conduct was announced on November 6 by Jewelers Vigilance Canada, a non-profit association of jewelers. Signatories to the Code promise to uphold the accounting already required by the Competition Bureau (www.CanadianDiamondCodeofConduct.com).

Once the rough stones already in the pipeline have been cleared, it will be much, much more difficult to fraudulently sell offshore diamonds as Canadian. Just look for confirmation from the retailer that the stones comply with the voluntary code. The closer accounting and GNWT certification process will come at a cost, but probably less than $200 premium per stone; ultimately the market will decide how much consumers are willing to pay for Canadian origin.