Victor mine is Ontario’s first and only diamond mine and the second of De Beers mine in Canada. (Image courtesy of De Beers)
De Beers Canada paid $226 in mining royalties to the Canadian province of Ontario between 2013 and 2014, related to its world-famous Victor diamond mine, a special report by Canadian Broadcast Corporation (CBC) shows.
The amount was determined by CBC reporter Rita Celli, based on the province’s budget and correspondence with government officials, despite both the current and a former provincial mines ministers told her that the diamond royalty was supposed to be kept confidential, she reports.
The thrifty amount compares to the almost $3.9 billion the government of Ontario received from the salt sector in the same period.
A De Beers Canada spokesperson responded to the CBC report, acknowledging that while the royalty figure was likely correct, the company is only now recouping its $1 billion investment in developing Victor mine.
The company anticipates eventually paying tens of millions of dollars in royalties from the project during the life of the mine, which currently extends to 2018. The Victor mine officially opened in July 2008.
The Ontario Ministry of Northern Development and Mines is bound by law to the terms of its royalty agreement with De Beers Canada confidential. However, the CBC determined that the province’s finance department reported the revenue from salt and diamond royalties together, as a single line item, in the provincial budget.
4 Comments
T Dongel
Simple transfer pricing… who in Govt is going to tell De Beers the actual value of the diamonds it is producing…
John
The former DeBeers is now Anglo who are a much different operation. They are not famous for Corporate Social Responsibility. The life production of the Victor mine is likely less than a small pickup truck level load and half of that will go into a vault never to be seen on the market. They are in the same mode in NWT at the Gucho Khe Project. They definitely will get their money out. JFB
Scott
Misleading article as it doesn’t state the basis on which royalties are paid. Bit like saying the mine paid no income tax either. Shock horror. Income tax is payable on profits, which are usually generated some time after the investment is made. Has that happened? How about a bit more information rather than a scaremongering article that really doesn’t tell us anything.
patentbs
This is the CBC! They are not known for presenting the whole story or even 2 sides to any story. The salt industry is mature. That means they have paid off the start up and development costs and are paying royalties and taxes based in their profitability. Victor mine will have cost recovery soon and the tax/royalty dollars paid will change.
It is most common in the diamond business that royalties are paid based on produced diamonds – not sold diamonds. So stock piling and high grading are discouraged by the structure.
When you dig for the details the story becomes quite boring and not really a news story!