Doug Ashbury
Northern News Services

NNSL (May 06/98) - There are about a million diamond cutters in the world. The lion's share, about 800,000 are in India.

Canada has about 50, according to Jan Morton.

Morton, who has been cutting diamonds for about two years, is vice-president of Edmonton-based Polar Star Diamonds Ltd.

Morton, and his father, Roger Morton, a retired University of Alberta economic geology professor, added diamond cutting to their existing retail jewelry business.

Morton said the number of Canadian diamond cutters is on the rise.

Numbers are up significantly in just the past two years, he added.

After training in South Africa at a De Beers-sponsored course, Morton started cutting diamonds at Polar Star about two years ago. To expand his knowledge, Morton hired two diamond cutters with combined experience of 25 years (one from Norway and one from Belgium).

Two years ago, said Morton, there were only a handful of diamond cutters in Canada.

Asked why they opted to add diamond cutting to the family's jewelry business, Morton said he "identified an opportunity to expand the business."

Polar Star buys its rough diamonds in Antwerp.

Ideally, Morton said he would like to buy rough diamonds from a Canadian producer.

He believes Canadian consumers will buy Canadian when it comes to diamond jewelry.

Morton, and his father, were in Yellowknife for the city's diamond conference, held Sunday at the Explorer Hotel.

The conference, the first of its kind here, included guest speakers from as far away as Antwerp.

Among the delegates was David Elliot, owner of Antwerp-based Diamond Tenders, a firm which sells rough diamonds through a closed-bidding process. Before starting the diamond-marketing company, Elliot held several executive positions with De Beers.

Elliot spoke about the various types of diamond marketing channels.

Diamond producers can either sell their product through De Beers' Central Selling Organization or through various open-market methods.

When it comes to mining companies selling their rough diamonds on the open market, tendering is one option. They could also set up their own sales office or they could joint-venture with a diamond dealer.

BHP Diamonds has set up a joint-venture marketing office in Antwerp. The move suggests they may sell their rough diamonds through various marketing channels.

Much of the world's diamond dealing is done in Antwerp. The Belgian city is the Wall Street of diamonds, Elliot added.

There are about 20 major diamond dealers in Antwerp, Elliot said. Dealers in this group typically employ three to 15 people plus one or two directors and three or four administrative staff.

Because the product has a high value and margins are low, "it is a high-risk business if you don't know what you are doing." Diamond dealing is not for the "faint-hearted," Elliot said.

It takes very little margin of error for a diamond dealer to fail to make a profit on a given deal. Diamond dealers must be fully in tune with the product and with fluctuating market prices.

"For rough diamonds there are no standard definitions or assortments."

But Elliot believes, some day, there will be classification system for rough diamonds.

On whether or not Canada will need a diamond dealer, Elliot said, first, it will hinge on the development of a Canadian diamond cutting industry.

For there to be a Canadian dealer, there will need to be diamond-cutting clients to buy the rough stones, as well as a ready supply of rough.

"The good news for aspiring dealers is that the investment in equipment is not great, just normal office furniture plus a few scales, sorting benches, a safe, and security equipment. No more than about $30,000 US. The bad news is there's just you, your diamonds and a calculating machine."