SOMBA K'E/YELLOWKNIFE - The territorial government is reviewing its policy on diamond manufacturing which was established in 1999.

The GNWT is reviewing its policy on diamond manufacturing in the territory. Pictured are gem-quality natural rough diamonds mined by Diavik Diamond Mines. - photo courtesy of Diavik Diamond Mines Inc.

The current policy requires a portion of the rough diamonds mined in the territory be made available for manufacturing in the territory by GNWT-approved manufacturers, said Deborah Archibald, director of mines, oils and gas division of the Department of Industry, Tourism and Investment.

She added it also says the territorial government will assist in the marketing of diamonds that are cut and polished in the NWT, through certification programming, for instance.

"We've been at this for 10 years. It's time to review it and update it and refresh it," she said. "Diamond mining was new to us and the whole cutting and polishing industry was new to us. We've had the benefit of 10 years of experience. We've learned a lot about what works and what doesn't work. There have been a lot of things that have changed in the market as well... We have new ideas, too. It's just time."

The review started last fall and is expected to last into the summer, said Archibald. The GNWT consulted with other departments earlier this year and is now meeting interested parties, such as diamond producing mines and manufacturers, she said. She added the territorial government will analyze the data and prepare recommendations before presenting a proposed policy to cabinet.

"Some of areas where we're considering making changes are eliminating the opportunity for loan guarantees for manufacturers but maintaining access to existing programs and services, enhancing our marketing and promotion initiatives to leverage opportunities to promote the NWT nationally and internationally," said Archibald.

Diavik Diamond Mines has produced 50 million carats since opening in 2003 -- 5.6 million in 2009 alone. Reserves were estimated in 2008 at 62 million carats.

"We welcome the opportunity to provide input. We are aware that the GNWT is planning to do this work," said Doug Ashbury, a spokesman with Diavik Diamond Mines Inc.

De Beers Canada did not provide a comment by press time. The diamond polishing industry has suffered in the past years. Crossworks International, owned by the HRA group of companies, is the lone operational polishing plant in Yellowknife since Arslanian Cutting Works closed last year. This came after Laurelton Diamonds Plant, owned and operated by Tiffany and Co., closed more than a year ago.

At its peak, the four factories - Arslanian, Sirius Diamonds, Laurelton and Canada Dene Diamonds - employed roughly 200 people and accounted for as much as 65 per cent of the territory's overall manufacturing shipments in value, if not more, according to a 2008 report prepared by Yellowknife-based Impact Economics for the NWT/Nunavut Chamber of Mines and the Mining Association of Canada.