by Anne-Marie Jennings
Northern News Services

NNSL (Apr 15/98) - The diamond industry may be new to the NWT, but building a remote mine in a land used primarily by aboriginal peoples isn't new to the diamond industry.

By far the best example is the Argyle diamond mine in northwestern Australia, some 2,200 kilometres from the closest city -- Perth. Production first came on line in the early 1980s, when the AK1 mine began production, boasting some of the richest kimberlite pipes in the world.

Today, Argyle produces 36 per cent of the total world production by volume -- and six per cent by value.

In addition to the quality of the diamonds, Argyle's AK1 is believed to be the only mine in the world currently producing pink diamonds.

But more interesting than the unique nature of the diamonds are the decisions that have shaped not only the history of the mine, but also the way diamonds are sold and marketed.

In the early going, little was understood about polishing the diamonds from Argyle, which is owned by a division of Rio Tinto, the same company developing Diavik in the NWT.

In order to ensure the diamonds would not be limited to industrial use, Argyle had to work to prove the diamonds could be properly polished. Expert polishers and cutters were brought to Australia to conduct a feasibility study to determine the commercial potential of the diamonds.

Another challenge faced by Argyle in the production of its diamonds was the delicate nature of the gems. Because the diamonds are coarser and more stressful, the danger of breakage is much higher for Argyle than in other mines around the world.

To keep the skills needed to polish and cut the diamonds in-house, Argyle has since the very beginning hired local cutting and polishing apprentices to work in the mine. Young people are trained at the company's Perth headquarters in the areas of polishing, shaping, and rough preparation work.

Argyle has also taken great strides in developing economic partnerships with both aboriginal and non-aboriginal partners, working to develop a better understanding of the need for cross-cultural awareness.

And unlike other diamond mines around the world, Argyle has become a rebel in the area of marketing its product.

The Central Selling Organization, which is the marketing division of De Beers, controls most of the diamonds sold around the world. Argyle did belong to the consortium for many years -- until 1996, when the mine did not renew its contract with the CSO and decided to go it alone. By removing itself from the CSO, De Beers was deprived of 78 per cent of Argyle's rough diamond production.

Since the split, Argyle's diamond production is now sold through its office in Antwerp, with 90 per cent of its total production being sold to India. Argyle is also making inroads in the fine jewellery market in both the U.S. and Japan.