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NWT takes ownership of diamond plantsTerritorial government to begin search for new operator in next two months
Northern News Services
Published Tuesday, May 10, 2011
Last week, McLeod confirmed the GNWT is in possession of the former Arslanian Cutting Works and Polar Ice cutting and polishing plants on Diamond Row, located north of the Yellowknife airport.
The property switch became official in mid-April.
The former owner of both facilities, Polar Ice Diamonds, went into receivership last fall while still owing several creditors approximately $42.4 million, including $5.8 million to the territorial government.
According to McLeod, the GNWT successfully wrestled the two buildings from the receiver appointed by creditors to liquidate Polar Ice's assets.
"The receiver put the buildings up for sale," he said. "We had been making that case that those two buildings shouldn't be a part of it and that ownership should revert back to us.
"At the end of the day, the receiver agreed with us and turned over the keys to the two factories."
The Arslanian plant, which employed 35 people and polished as many as 4,000 diamonds a month, closed in late 2009, and the GNWT is keen to see it up and running again.
The government's acquisition comes on the heels of its recently-revised diamond strategy, which called on the GNWT to work with factories that are "organized and operated in a manner that is economically sustainable."
Yellowknife is currently home to only one active cutting and polishing plant, Crossworks Manufacturing, owned by the Vancouver-based HRA Investments.
Asked if the GNWT will welcome a bid from that company, McLeod said, "We will welcome all bids."
Dylan Dix, spokesperson for HRA Investments, said, "Crossworks has been interested in the past and continues to be interested to expand its operations in the North. We await to hear the GNWT’s process for moving forward with the sale of the factory."
Dix's comments lend credence to McLeod's claim that the secondary diamond industry is already anxiously circling the plants.
"I think there's a lot of interest out there," said McLeod. "They may or may not know that there hasn't been a new diamond mine developed for some time. The demand for rough diamonds continues to increase and the value of rough diamonds continue to increase."
McLeod added there are still items that need to be ironed out with Polar Ice's receiver before the GNWT can move forward with its call for bids, a process it hopes to start in the next month and a half.
Securing the GNWT's presitigious Polar Bear Diamond is chief among them, he said.
"They're frozen; we need to make sure that the receiver understands and agrees that those trademarks belong to us."
That aside, McLeod said the GNWT's active stake in the plants signals the start of a new, hopeful chapter in the city's troubled history as a diamond manufacturer.
"I believe that with our new diamond policy and with having the buildings back free and clear, we're well positioned to getting our factories working, taking up the rough allocation and having a sustainable secondary diamond industry."