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(Rapaport...February 7, 2005) The decision by Israeli diamond dealer Lev Leviev not to purchase Sirius Diamonds leaves one of Canada's arctic territories hunting for a new buyer. The government of the Northwest Territories forced Sirius into receivership mid-year 2004 and has since lost $3 million on the facility located in Yellowknife.
Sirius Diamonds continues to produce even though the plant operates at a loss, according to CBC News on February 4. Leviev was chosen by the government based upon its historical successes, but Lev Leviev could not reach an agreed-to supply of rough diamonds with neither the Ekati mine, owned by BHP Billiton, nor the Diavik mines, a joint venture between Rio Tinto Ltd., and Aber Diamonds Corp.
Wages and operating costs are high in Yellowknife compared with other locations, and the source of rough supply to Sirius Diamonds is still not clear. In a 2004 statement, De Beers, which owns the Snap Lake mine in Northwest Territories, said that it will honor its commitment to supply rough to Yellowknife plants, but they told CBC radio that it was under no obligation to supply to “a specific business.”
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