Canadian diamond polishing plant closes

One of Canada's four diamond polishing factories closed this week, sparking a debate about whether the Northwest Territories' (NWT) cutting industry can compete with cheaper labor centers, such as India.

Sirius Diamonds went into receivership last Tuesday after it failed to reach a new financing agreement with the government of the NWT. The closure, says Mayer Gniwisch, a diamond industry executive based in Montreal and quoted in Canadian Diamonds magazine, is evidence that the Canadian industry faces a fundamental problem: how to compete with factories in developing nations, where labor costs can run one one-hundredth the cost of those in Canada.

Finance Minister Floyd Roland countered, saying that Sirius was a casualty of the infant industry's "growing pains."

"As with any new developments that happen, when it's a new development—I mean it was new for Canada, never mind the Northwest Territories—I think we can look at any new industry and there's some rough times to start with," Roland told Canadian Diamonds.