Ontario gets $0.75 for every $1 million in Diamonds mined by De Beers

We found out yesterday that De Beers paid only $226 in royalties to the Ontario government for the company’s diamond mining operation in the province, thanks to an investigation by CBC’s Rita Celli.

The reason that Celli had to do an investigation to find that number is because the royalties collected from Ontario’s only diamond mine has been a closely guarded secret, by the government and the company.

But just how much did De Beers make from the Victor Mine?

The mining company annually extracts 714,000 carats of diamonds at $419 per carat, according to De Beers Operating and Financial Review for 2008, a figure that is confirmed by the Ontario Geological Survey.

As the average price of diamonds has remained mostly stable between 2006 and now, we can estimate that De Beers Canada extracts $300 million worth of diamonds every year.

In other words, De Beers is paying the province royalties at the rate of 75 cents per million dollars of diamonds extracted.

What is happening in Ontario is not unique to that province.

In British Columbia, Premier Clark’s government is selling water to Nestle at $2.25 per million litres. Nestle’s bottled water retails for around $1.50 per 500ml.

In Alberta, a royalty miscalculation by the Progressive Conservatives robbed Albertans of $13.5 billion in oil and gas revenues, according to a study by University of Alberta.

“According to Natural Resources Canada, mining companies generated over $93.3 billion in gross revenue in Ontario over the last 10 years,” the advocacy group MiningWatch Canada wrote in a letter to the Auditor General for Ontario. “During the same period, a meagre 1.5% was generated in mining royalties – 10 times less than a tip at a restaurant!”

In the case of diamonds, the government of Ontario seems to be collecting an infinitesimal fraction of one percent.

“Low mining royalties are unacceptable, particularly considering that companies are digging up collectively owned non-renewable resources, which will no longer be available for future generations,” the group pointed out.

Source: https://thinkpol.ca/2015/05/14/ontarians-get-only-75c-for-every-million-dollars-de-beers-makes-mining-diamonds-in-ontario/

Image Source: Same as source

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