Diamonds in Canada editorial: Dominion’s latest transformation

In recent decades, Dominion Diamond has been one of the more interesting companies to watch — not just in the diamond space but in mining, period. As Aber Diamond, it was there at the birth of Canada’s diamond industry in the early 1990s and in fact had a starring role in the discovery and development of the Diavik mine. Under the leadership of the late Bob Gannicott, the company followed an unorthodox path — becoming a retailer with the purchase of Harry Winston Diamond in the mid-2000s, when there were few other growth opportunities in diamonds.

Years later, when the health of the retail side was much improved, it shed the luxury retail division for a fat profit and invested the cash in a more attractive asset that had come up for sale — Canada’s first diamond mine, Ekati.

Since Gannicott stepped away from Dominion for a medical leave in late 2014 (he passed away last year after battling leukemia), the company has lacked a similarly passionate champion. Indeed, it had been searching for a new CEO when Washington Companies expressed its interest in acquiring the company earlier this year.

So it will be fascinating to see what new transformation the sale will bring to Dominion when the acquisition closes in late 2017.

The fact that Washington is interested in a diamond miner is probably a positive indicator for the diamond sector.

In an interview with Canadian Mining Journal last month, Stornoway Diamond CEO Matt Manson noted that with three new diamond mines having started up in the past year, “we’re at peak production
right now.”

But while the diamond market is currently oversupplied, it will not remain that way forever.

Washington is a U.S.-based company, and that has caused the usual concerns about Canadian assets coming under foreign control. In this case, the angst is somewhat heightened by Ekati’s status as Canada’s first diamond mine.

But Washington has gone to some lengths to reassure regulators, shareholders and the public that nothing much will change under its ownership.

It has sought to reassure Canadians that it’s here for the long haul, stating: “Washington will be a responsible, long-term operator and builder of Dominion’s world-class assets, and plans to extend the mine life of Ekati for decades, consistent with the current development plan.”

It has indicated that the company’s headquarters will remain in Calgary after being moved there from Yellowknife earlier this year.

The company has also committed to deploy capital to develop the Jay and Fox Deep projects at Ekati, and make new investments in exploration. In addition, it has promised to “maintain a significantly Canadian management team,” hiring Patrick Evans, former head of Mountain Province Diamonds and a Canadian diamond mining insider, as CEO.

It’s too early to evaluate Washington’s commitments: at presstime on Nov. 2, the acquisition had only just officially closed. But we look forward to covering Dominion’s next chapter, and hope that as a private company, it will continue to be open about its plans at Ekati and elsewhere.

–This story originally appeared in the November 2017 issue of Diamonds in Canada.