Northern News Services
That means the company will soon be recruiting diamond-cutting trainees.
"It will probably handle less than a quarter of the diamonds we purchase from Diavik but it certainly is an important start," said the American luxury retailer's Mark Aaron. "We think it is important to employ people in that area."
Tiffany will bring experienced diamond cutters to Yellowknife from overseas then hire people who want to learn the gem-polishing trade.
"The factory will commence operations with about 20 people," said Aaron but he added that plant numbers could go as high as 75 people.
That's optimistic thinking, considering Yellowknife's huge labour shortage.
The territory has the highest percentage of employed people in the country - business and industry has been reeling from the lack of workers.
"We obviously feel there is a potentially talented labour pool to recruit from," said Aaron.
Last month, Deton'Cho diamonds in Ndilo shut down its cutting room. The Yellowknives Dene own that business.
Tiffany said it is committed to aboriginal involvement.
"We feel it makes business sense but we think it is the socially responsible thing to do as well - to create jobs, to support the local community," said Aaron.
A first for retailer
The venture is a first for Tiffany. In the past, the company bought its stones already cut. So Yellowknife is home to its only cutting plant.
"This is all a brand new way of doing business for Tiffany," said Aaron.
Tiffany and Co. is a world-renowned high-end gift and jewelry retailer.
The stores capitalize on their own exclusivity. When Diavik mine starts to produce, its diamonds are expected to be amongst the most valuable in the world.
The single-storey, 12,000 square foot Yellowknife Tiffany cutting house will cost the company about $3 million to build. Tiffany's has an agreement with Aber to buy at least US$50 million in diamonds annually for 10 years. Aber is 40 per cent owner of the Diavik diamond mine and will start producing gems in April.
At US$50 million per year, Aber's diamonds are less than half of Tiffany's annual diamond needs.
Tiffany's jewelry has a reputation of selling some pieces for millions of dollars.
Tiffany's Diavik diamonds will tour the country before coming back to Yellowknife to be cut. They will go from the mine, to the Diavik sorting facility, located next door to the new Tiffany building.
There, the diamonds will be sorted and distributed - that's where Aber gets its share. But the diamonds won't enter the Tiffany building yet. Aber's diamonds will be flown to Toronto to the its sorting facility there.
Then finally, the Tiffany gems will be flown back to Tiffany in Yellowknife.
Tiffany expects to start cutting Diavik diamonds by April.
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.
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 it's clear Tiffany's plans to market NWT gems based on the romantic appeal of the Canadian North.
The Canadian diamond industry is still very young and efforts to name-brand gems have been limited.
BHP Billiton, Ekati Mine owner, has struck out to find a marketable brand. And Sirius' diamonds - the ones with the tiny polar bear emblazoned on them - have attracted enormous attention from consumers.
Name-branding diamonds is a growing marketing issue.
But right now most Tiffany's customers are interested more in the Tiffany's name than where the diamond is coming from.