> De Beers’ mining activities directly and indirectly generated more than C$1.2 billion of GVA in 2015.
> C$635 million (51 per cent of total) relates to indirect impacts, arising as a consequence of De Beers’ procurement and the economic activity it supports through its supply chain.
> In addition, the employment supported directly by De Beers, and indirectly through its supply chain, generates income for employees, whose spending translated into an induced impact of C$219 million in 2015.
> De Beers’ total employment contribution in 2015 was 7,300 FTEs, of which 1,400 were directly employed, 4,000 were attributable to De Beers’ supply chain (21 per cent of which were onsite contractors) and 1,900 related to induced economic activity.
> In 2015, De Beers’ activities resulted in direct payments to Government of C$95 million.
Note: Figures are presented in 2016 C$ in order to remain comparable with those reported elsewhere in this document. Inflation adjusted figures are used in order to provide representative comparisons over time.
Canada first became a diamond producer in 1998 and in 2015 was the world’s fifth largest diamond producer by volume, accounting for nine per cent of global production. This follows Russia, Botswana, Democratic Republic of Congo and Australia, which collectively account for 72 per cent of world rough diamond production by volume.11 Canada is the world’s third largest producer by value.
The Canadian diamond mining industry employs 2,650 people in mine operations and another 1,500 in support industries, such as maintenance, catering and transport. Aboriginal people account for approximately 30-40 per cent of the mining workforce.
The wider mining sector in Canada accounts for 18 per cent of the value of Canadian exports (2014).12
Beyond the direct and indirect impacts of De Beers’ mining activities in Canada, De Beers takes steps to facilitate further economic activity to ensure that its activities benefit the communities where it operates.
Up to 10 per cent, by value, of the diamonds extracted from De Beers’ mines in the Northwest Territories (NWT) and Ontario are made available to Canadian Sightholders, who cut and polish the rough diamonds they purchase ready for jewellery manufacturing and retail.
Over the past decade (2006 to 2015), this practice has ensured that C$230 million worth of rough diamonds have been cut and polished within Ontario and the NWT. This brings job opportunities into these regions, supporting the Canadian Government’s strategic objective of developing the long-term growth prospects in these areas.
De Beers carries out retail activity in Canada through Forevermark, the diamond brand from The De Beers Group of Companies, and De Beers Diamond Jewellers, a 50/50 joint venture with LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury goods company.
Forevermark has had a presence in Canada since 2012, partnering with nearly 40 of Canada’s most respected retail jewellers.
Since 2006, De Beers’ Canadian operations have yielded C$550 million in payments to Government.
The majority of these payments result from income taxes paid by De Beers employees on their salaries, accounting for 58 per cent of the total.
Payments to Government include the Impact Benefit Agreements (IBAs) support to First Nations, contributing 10 per cent over the last decade. Property taxes and royalties collectively account for 11 per cent, with the remaining 21 per cent representing ‘other’ payments to Government. These include employment insurance, health tax, workers’ compensation, pension plans, fuel tax, insurance excise tax, and land transfer tax.
While De Beers’ operations have made sizeable payments to Government, they have not been liable for corporation tax thus far. This reflects the tax framework, which provides tax relief to allow for the high risk and uncertain returns on investments made during the exploration and development phases of the mining cycle.14
Between 2006 and 2015, Victor contributed C$3.0 billion in Canadian gross exports. In 2015, the mine contributed 16 per cent of Canada’s diamond exports by value.17 A further 1.5 million carats are expected to be mined before currently planned production ceases in 2018.18
Over the same period, Snap Lake contributed C$1.0 billion in Canadian gross exports. In 2015, the mine accounted for 11 per cent of Canada’s diamond exports by value.19
In addition, Gahcho Kué is expected to produce approximately 54 million carats from an estimated 35 million tonnes of ore over the life of the mine.20
Between 2006 and 2015, De Beers’ operations have directly supported 1,000 full-time jobs on average annually in Canada. In addition, De Beers has indirectly supported on average a further 2,600 jobs a year through its supply chain, 23 per cent of which were onsite contractors. The induced employment impact was an additional 1,300 jobs on average annually over the same time period.
De Beers’ direct employment in 2015 alone (1,400 FTEs) was equivalent to 2.2 per cent of the total mining sector across Canada, rising from 1.8 per cent in 2011 (1,000 FTEs).16
The rise in employment over time highlights the fact that De Beers’ employment impact has increased at a faster pace than that of the mining sector as a whole.
10. Global production based on De Beers’ analysis.
11. Kimberley Process Certification Scheme (2015) annual statistics.
12. The Mining Association of Canada (2015), Facts and figures of the Canadian mining industry.
13. Payments to Government have been reported on a payments basis, with the exception of employee taxes, which have been reported on an accruals basis.
14. For further discussion, see: Anglo American (2015). Driving change, defining our future: Tax and economic contribution report 2015.
15,17,19. Gross exports reported here to assist comparison. Kimberley Process Certification Scheme (2015) annual statistics.
16. Figures based on Statistics Canada employment data by sector.
18,20. These indicative projections are based on De Beers’ currently planned activities, which are dependent upon a number of factors, including the prevailing and expected price of diamonds. For further information, refer to the Anglo American Ore Reserves and Mineral Resources Report 2015. Note, however, that Snap Lake has been placed on Care and Maintenance since its publication.