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Breakfast at Yellowknife

Tiffany & Co. looking at cutting diamonds in North

Thorunn Howatt
Northern News Services

Yellowknife (Aug 07/02) - A big name in diamonds and jewelry is looking North in a big way. Tiffany & Co. is looking for a place to cut its new Canadian diamonds.

"It is certainly something Tiffany will have to address in terms that being next year we will be buying diamonds directly from Aber and they will be rough uncut diamonds," said Mark Aaron of the American luxury retailer. "That is an issue we're addressing in terms of who will do the cutting of those diamonds."

Tiffany's has an agreement with Aber to buy at least $50 million US in diamonds annually for 10 years. Aber is 40 per cent owner of the Diavik diamond and will start producing gems in April.

"Tiffany's has a large appetite for high quality diamonds," he said, explaining that even at $50 million per year, Aber's diamonds are less than half of Tiffany's annual diamond needs.

With Yellowknife's expanding reputation as an internationally known diamond-cutting centre, Tiffany's could be eyeing up the Northern city.

"I certainly don't rule it out," said Aaron. But he added that the idea was too early to comment on.

Tiffany's jewelry has a reputation of selling some pieces for millions of dollars.

The jewelry and gift retailer has 130 stores in 17 countries. Its revenue last year was $1.6 billion with jewelry representing 79 per cent of its sales. Its shares are traded on The New York Stock Exchange as TIF.

"We have been interested in being able to secure a portion of our annual diamond needs if we could find an appropriate mine," said Aaron.

"We felt that if we could find a mine that looks like it will produce a substantial amount of diamonds of quality that meets Tiffany's standards, we would be interested in setting up some sort of long-term supply arrangement."

Right now Tiffany's is buying its diamonds from cutters and diamond middlemen -- from Africa, Russia and even Canada. The company doesn't market its gems based on their origin.

"But Canada is going to change that," said Aaron.

Most Tiffany's customers are interested more in the Tiffany's name than where the diamond is coming from.

"But that doesn't mean that there might not be an opportunity to market it that way at some point."