BHP Billiton blamed for low quality & closure of Yellowknife plant

A major Israeli diamond merchant is blaming Ekati diamond mine owner BHP Billiton for the recent closure of a Yellowknife diamond polishing and cutting plant, saying diamonds supplied from Ekati were low quality and too expensive. Moshe Namdar, Israels third largest diamond exporter went into a partnership with the Yellowknives Dene First Nation to form Canada Dene Diamonds, the company that closed its doors ON May 2, 2006. The companys failure puts 11 diamond polishers out of work.

A spokesman for Moshe Namdar in Israel is blaming BHP Billiton for providing poor quality diamonds at a high price to Canada Dene Diamonds. "Unfortunately, as (the) expression goes: shit in, shit out. You can only do so much with what you have," Moshe Namdar spokesman Abraham Silverstein commented as reports in Yellowknifes News newspaper published May 12, 2006. Silverstein said the Ekati diamonds provided to Canada Dene Diamonds were too shoddy and too expensive to turn a profit. Canada Dene Diamonds never got close to breaking even and Moshe Namdar was forced to close the operation.

"We knew going in that manufacturing costs were higher (but) we lost millions and millions," said Silverstein. Now the Public Service Alliance of Canada, which represents striking Ekati diamond mine workers, is asking if BHP Billiton is sending its best diamonds for processing overseas while only making low quality diamonds available to the local diamond polishing and cutting industry at unfair high prices. "BHP Billiton is already treating its own workers with contempt by forcing them to go on strike to win a fair first collective agreement and now we see how poorly it treats a local business employing northerners and aboriginal workers," said Jean-François Des Lauriers, PSAC Executive Vice-President-North.

Todd Parsons, President of the Union of Northern Workers component of PSAC, which represents Diamond Workers, said the closure and comments will harm the Canadian diamond market. "It can only hurt the international reputation of Ekati diamonds and all
Canadian-produced diamonds when the diamond industry reads such negative comments coming from a leading Israeli diamond firm," said Parsons. Ekati produces 6% of the worlds diamond supply by value or 4% by weight and yields 3 to 5 million carats annually. It is located 300 km northeast of Yellowknife and 200 km south of the Arctic Circle.