Northern polishing plant: A shining venture

Matt Ross
10/27/04

YELLOWKNIFE, Northwest Territories - Deep in the heart of Yellowknife's Old
Town, just where the paved road ends and the gravel starts, there's an
unassuming three-story building. Though the largest structure in the area,
its plainness means it's easy to overlook. But, moving through the hallways
are tens of millions of dollars in goods that can fit in the palm of a
hand.

Probably the world's only Aboriginal-owned diamond polishing plant, Canada
Dene Diamonds (CDD) is in its second year of operation. After undergoing
financial restructuring, during its first 12 months after re-opening the
factory grossed $40 million. ($29 million U.S.)

Paired with Schacter and Namdar, Israel's leading diamond manufacturers,
CDD has learned from the mistakes of its predecessor, Deton'Cho Diamonds.
With an established partner on the global scene, the plant has the
resources and the knowledge to expand.

"It isn't enough to cut and polish diamonds but to market the finished
product," said Neil McFadden, CEO of the Deton'Cho Corporation. "[The
partner] has to be someone who is well placed in the industry that has the
expertise and skills to cut diamonds and train people but has an extensive
marketing access."

Canada Dene Diamonds is one of 13 businesses within the Deton'Cho
Corporation, the financial arm of the Yellowknives Dene First Nation.
Certainly though it's CDD that's following an economic trend. Diamonds were
commercially mined in the Northwest Territories (N.W.T.) as of just six
years ago and while the city of Yellowknife is recognized as the "Diamond
Capital of North America" the industry is still in its infancy.

With two companies mining the stones 200 miles from Yellowknife, very
quickly Canadian diamonds have established their quality on an
international market. That's why the Israelis were eager to join with CDD.

"There is now access to some of the best rough diamonds in the world," said
McFadden. "The Canadian diamonds mined are better than the African and
Russian diamonds."

Because of the relative early days of diamonds in the N.W.T., assistance is
required to develop a local work force. Of the 40 employees at CDD, half
are from overseas and only six of the 15 diamond polishers are from
Yellowknife. Canada Dene Diamonds however is making the commitment to
hiring locally if the prospective employee makes an initial investment of
their time. Gaining the rudimentary skills to become a diamond polisher
requires a minimum five-month course at the local Aurora College. Starting
at around $20 an hour, polishers earn more once their skill improves and a
daily output is maintained. Usually, the CEO points out, it takes about
three years to become an accomplished polisher. The foreign workers
meanwhile earn at least 50 percent more based on their talent and
experience. McFadden said they were recruited to CDD because their
production balances out the lesser quantities of the local trainees who are
not yet as proficient.

That doesn't mean local abilities aren't diamonds in the rough. One of the
Native Canadians who's already being groomed for management is Noonee
Sanspariel. At 23, he's been in the industry for four years and has seen
the ups and downs at Deton'Cho, including when the original business closed
its doors. A part-time firefighter back in 1999, Sanspariel decided to look
into the college course.

"This caught me off guard so I thought I'd try it out," he said. "Might as
well start somewhere and take advantage while it was here." Believing he'd
have the aptitude for diamond polishing because he enjoyed painting,
Sanspariel realized that cutting stones left very little room for
creativity. Or error. "You have to have the patience. That's why after six
months you can see if you are or aren't going to do well," said Sanspariel.
Quickly progressing as a polisher, Sanspariel has spent six months in
Antwerp, Belgium learning the finer points of the diamond business. It was
there, in the hub of the world's market for these precious stones, that he
saw the enormity of their value. "Put me down for 50, 100, 150," Sanspariel
recalled as he heard those numbers frequently. "They were talking about $50
million and then they'd hand over the bag of goods." When he isn't
polishing, Sanspariel is given time off by CDD to work as an evaluator.
There are very few positions in Canada like this as he determines the value
of the diamonds for the federal government for tax royalties.

Yet, for all of the wealth that's flowing through the doors of Deton'Cho,
McFadden points out there have not been any signs of animosity or jealousy
by the local band members. "It's seen as another opportunity for employment
and to reinvest in the community. Because they're the owners, Deton'Cho,
everyone benefits."

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