Diamond Mining in Northern Canada

ype of service:Writing from scratch
Work type:Essay (any type)
Academic level:College (1-2 years: Freshman, Sophomore)
Subject or discipline:Economics
Title:Diamond mining in northern Canada
Number of sources:1
Provide digital sources used:No
Paper format:APA
# of pages:3
Spacing:Double spaced
# of words:825
# of slides:ppt icon 0
# of charts:0
Paper details:This is a group job, the content is about Diamond mining in northern Canada. In writing guidelines above, I used the pen to list the requirements. A total of six parts, but I only need to complete the second and fifth parts(2. economic issues identification. 5. economic recommendation(and why?) ).
On the second part(economic issues identification), the main focus on the following three points: 1. Market demand decline (especially in the Chinese market), 2. Diamond mining risk, 3. Diamond production and quality becomes low. This part need to be linked with the third part.
The fifth part(economic recommendations and why) is written according to the fourth part(Options for dealing issues).
My partner has finished the third and fourth parts, so my part needs to be associated with it. Because it is a team operation, so we need to finish the six parts first, and then need to re-integration. I will post the third and fourth parts on Additional materials.There is already some source of information, but if you need to add extra, you can also find some.

Part Two: Economic Issues Identification

  1. Market Demand Decline (Especially in the Chinese Market)

The diamond mining sector has suffered a decline in market demand due to the changing perception of marriage among millennials. Sanderson (2017) notes that unlike baby boomers, millennials would rather use less money buying wedding bands and spend most of it travelling or honeymoon. To illustrate the same, a study was conducted in 2015 and compared to the results of the same questions as answered in 1980 (See Fig. 1). Although the study was based in the United States of America, the same trend has been reported in the Chinese jewelry market, which slowed down since 2014. In fact, the number of weddings in China is reported to have dropped by eight percent in 2015. In addition, China has a policy that restricts people to only one child, which was increased to two in 2015. Nevertheless, there are minimal signs indicating a possible rise in the demand for diamonds in China because retailers are recording drops in demand and sales and the perceptions of the millennials towards marriage are not changing.

Figure 1: A Comparison of Baby Boomers and Millennials Responses on Marital Status

Source: (Sanderson, 2017)

  1. Diamond Mining Risk

Northwest Territories are at a crossroad due to the delayed exploration of the mines, which could translate into unprecedented costs. Recently, it was reported that the planned construction of Ekati mine would be postponed to next year. Dominion Diamond Corporation cited delays in receiving the necessary permits in order to commence construction. Similarly, Diavik Diamond has an ongoing row with the land and water board, which has rendered the future of the company uncertain (Quenneville, 2016). The regulations that have been enacted recently are hugely affecting the progress of the mining companies. Moreover, the opportunity costs incurred are rendering the industry uncertain and the risk of operation is at an utmost high. For example, the contractors that have already been booked have to be paid in cases where they are requested to halt operations. Therefore, companies are suffering delayed operations due to regulations that have been introduced, making it a risky business due to the accrued opportunity costs.

  1. Diamond Production and Low-Quality

Although the mining of diamond in Northern Canada was lucrative for the last five decades, production is expected to end in late 2018 or early 2019. Notably, the mines will be exhausted by the aforementioned period, meaning that some of the employees in the industry will lose their jobs. Besides, as the mines are completely depleted of the mineral, the quality of the product is questionable. Nevertheless, companies such as De Beers have developed strategies to ensure that they only sell approved quality. For instance, they have experts, especially immigrants who are well versed polishers on site to ensure that the product delivered in the market is the required quality. Therefore, although the benefits of the extracted diamond will benefit the country for decades, its depletion will have a negative effect on the economy, especially in the employment sector…

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