Dominion After Harry Winston Mulls Diamond Sales PlatformLiezel Hill
Dominion Diamond Corp., which sold the Harry Winston jewelry brand last year to Swatch Group AG, is considering an online sales platform for polished stones that originated from its Canadian mines.
The business-to-business website could help market the gems while giving the company some of the insight into the polished market that it relinquished by selling Harry Winston, Chairman and Chief Executive Officer Robert Gannicott said last week in a phone interview.
Gannicott has transformed Dominion in the past 18 months by acquiring BHP Billiton Ltd.’s 80 percent stake in the Ekati mine in Canada’s Northwest Territories and then selling the Harry Winston business to Biel, Switzerland-based Swatch for $1 billion. The Ekati transaction included ownership of BHP’s CanadaMark trademark, a marketing initiative the world’s largest miner launched in 2003, Gannicott said.
“We’re going to revitalize that and may well turn it into a polished-sales platform,” Gannicott said. Buyers of Dominion’s rough stones could resell some of the diamonds, after they are cut and polished, through the website with the CanadaMark certification, he said. “And of course that would then give us another price reference.”
The planning of the potential sales platform is still in the early stages, Gannicott said. In addition to Ekati, Dominion owns 40 percent of the nearby Diavik mine, which is operated and controlled by Rio Tinto Group.
Certification of a diamond’s origin is central to the Kimberley Process, a global effort by governments, industry and civil society to stem the flow of diamonds used to finance civil wars. BHP created the CanadaMark tracking system to guarantee the purity and origin of diamonds from Ekati and help market the stones.
“If you wish to have a Canadian diamond, this is a way that you know that you’ve got one,” Gannicott said.
Demand for rough diamonds, which softened from around the middle of last year, has begun to improve, Gannicott said. Rough diamond prices have increased by about 2 percent since November, he said. U.S. demand over the holiday period was good and there are signs of continued demand from China, the second-largest consumer.
“We are thinking that over the full year we might see a total of a 4 percent rise,” he said.
Dominion changed its name last year from Harry Winston Diamond Corp., and senior management, including Gannicott, moved to the Northwest Territories capital Yellowknife after the Ekati acquisition.
Gannicott also had expressed interest in buying Rio Tinto’s share of the Diavik mine after the world’s second-largest mining company said in March 2012 it was considering a sale. Rio announced in June last year it decided to keep the assets.
While Dominion assesses other mining assets that come up for sale, the company is focused on its own project to develop two kimberlite discoveries named Jay and Cardinal near the Ekati mine, Gannicott said. The company expects to complete a prefeasibility study this year and is targeting production from the expansion late in 2019. The cost of the project will probably be in the range of $500 million to $1 billion, he said.