Tiffany & Co., Manhattan“s famous jeweller, is taking a radical step by buying into a diamond mine, in the hope of securing a steady supply of gems at cheaper prices.
According to a recent report, i…
Tiffany & Co., Manhattan“s famous jeweller, is taking a radical step by buying into a diamond mine, in the hope of securing a steady supply of gems at cheaper prices. According to a recent report, it is paying about UK 45 million for a 14.3% stake in Aber Resources, which runs the massive Diavik mining project in a joint venture with Britain“s Rio Tinto. The diamonds will come from the massive Diavik mining project in the Northwest Territories of Canada – 40% owned by Aber and 60% by Rio Tinto. Construction of the mine is expected to start next year, subject to government approval. James Fernandez, the chief financial officer of Tiffany & Co. will take a seat on the board of directors of Aber, the report said. “Tiffany will now have control over a diamond from the moment it comes from the mine to the ring or pin that it is set in,” according to an analyst. Another Wall Street analyst said: “This is the first time a well-known jeweller like Tiffany is going directly to the source. The diamond business has never been run like this before.” Although its target is 50%, Tiffany & Co. currently produces 31% of its products, including jewellery, china, stationery, crystal, watches and clocks and leather goods. Tiffany, quoted in New York, said recently it will get a “considerable portion of its future diamond needs” from Aber at “competitive prices”. The company was founded in New York in 1837, and now has branches all over the world. It has seen its shares double over the last five months and is now capitalized at US$ 3.7 billion. Much of the diamond industry is pinning its hopes on Canada as one of the main diamond producers of the next millennium, the report added. The country is expected to produce 10% of the world“s diamonds by the year 2002.