by Richard Gleeson
Northern News Services

NNSL (Sep 19/97) - A week-long overseas visit to diamond trading centres is being hailed as a crucial step in ensuring the North gets its fair share of benefits from NWT diamond mines.

"It's about jobs, jobs and Northern benefits," said Yellowknife MLA Centre Jake Ootes .

"The federal government stands to gain about $2.4 billion in royalties over the 25 year life of the mine," said Ootes.

"There's a lot at stake here," he said. "We've got to act and we've got to act now."

Canada's first diamond mine, located 300 kilometres northeast of Yellowknife, is slated to go into production next year. Majority owner is Broken Hill Properties (BHP) of Australia.

The mine is expected to produce between three million and four million carats annually in its first 10 years. That's three per cent of the world's current annual production.

At least three more diamond projects in the NWT are expected to start producing in the coming years.

Ootes travelled with fellow Yellowknife MLAs Seamus Henry, Charles Dent, and Roy Erasmus, as well as Finance Minister John Todd and Mackenzie Delta MLA David Krutko, chairman of the standing committee on resource management and development.

The group left Yellowknife Sept. 5 and spent three days in Antwerp, Belgium and two in London, England.

During the stay they met with top-level executives from the eight largest diamond processing companies in the world, including DeBeers, BHP and Rio Tinto.

Ootes said the trip had two key goals -- to learn more about the diamond industry, particularly sorting and evaluation, and to let captains of the world diamond trade know the Northwest Territories is ready to do business.

In a press release issued Tuesday, Todd noted accurate evaluation of diamonds recovered in the North is critical to the collection of royalties and taxes.

"We were advised by experts in the industry, in order for this to happen, diamonds must be evaluated in Canada prior to being exported overseas," Todd was quoted as saying. He said no other country allows rough diamonds to be exported.

Hay River MLA Jane Groenewegen, in a newspaper article last week that referred to the $34,000 trip as a "junket," said the involvement of all four Yellowknife MLAs indicates the government is favoring Yellowknife as a site for a diamond sorting plant.

The Department of Indian Affairs and Northern Development is currently developing regulations that will define royalty sharing and taxation for diamond mines.

Ootes said GNWT officials and MLAs, including himself, are consulting with DIAND on the regulations and the location of any sorting plants to be established in Canada.

"We are also going to meet with (Western Arctic MP) Ethel Blondin-Andrew to emphasize she must put the message across that this (diamond-sorting facility) needs to go in the North," said Ootes.

Currently, all royalties on minerals extracted in the North go to Ottawa. For the last few years DIAND, in consultation with the GNWT, has been reviewing the regulations with a view to updating them and making them applicable to diamond mining.

Royalty rates are also being reviewed.