Doug Ashbury
Northern News Services

NNSL (Mar 08/99) - Give them the diamonds and they will come.

Joe Handley, Resources, Wildlife and Economic Development deputy minister, says 10 companies currently have diamond sorting and polishing plant proposals before the GNWT.

Handley, who preferred not to name the interested parties because no deals have been signed, said two of the plans are advanced enough that if the firms could be guaranteed a supply of rough diamonds, the proposals would be given the go ahead.

The group of 10 are "legitimate companies looking to do business here."

"Our economy has to be diversified, otherwise we are just a source of raw materials," he said.

"We can't let this opportunity slide by."

According to one diamond-cutting and polishing business owner in Western Canada, who preferred not to be named, diamond sorting, cutting and polishing could generate 1,000 direct jobs in the North.

Key to getting the cutting and polishing facilities on the ground in the NWT will be a supply of rough diamonds, Handley, who spoke Thursday at the Diavik Diamonds project public technical review sessions in Yellowknife, said.

But because the federal government has control over the NWT's resources, there is little the GNWT can do. And, adds Handley, the last thing the GNWT wants to do is raise the threat of taxation.

Any legislation requiring Diavik to hand over rough diamonds to Northern companies would have to come from the Department of Indian Affairs and Northern Development. Royalty rules already ensure the federal government will get huge dollars from the proposed Diavik diamond project.

Handley said Sirius Diamonds, due to be operational May 1 at its Yellowknife cutting and polishing plant, uses .8 per cent of BHP Diamonds production by weight and 2.5 per cent by value. Sirius has a supply arrangement with BHP Diamonds.

Sirius Diamonds, with the two most promising proposals now before the GNWT, would require a total of only 6,000 to 7,000 carats a month. Each of these plants has the potential to create 30-40 jobs.

"This is clearly a socio-economic issue," Handley said. DIAND's Environmental Assessment Guidelines, released August 26, say consideration must be given to opportunities to diversify the Northern economy.

Handley said he raised the issue Thursday because a presentation by DIAND a day earlier made no mention of the value-added side of the diamond industry.

Diavik spokesperson Doug Willy said the company has said it will sort and value its diamonds in the North.

But he questioned whether the environmental assessment was the correct forum to examine the value-added side of diamonds.

"We're open minded about sales to Northern companies," he said.

David Livingstone, renewable resources director with DIAND in Yellowknife, said the federal government is not prepared to demand Diavik supply a steady amount of diamonds to Northern companies.

For Handley, this is not good enough. He cited examples where resource companies in other parts of Canada have been required to "give something back" for the commodities they have taken out of the ground.

The GNWT wants Diavik to provide more information on marketing to Northern companies. The response that Diavik will do "what makes good business sense" is not detailed enough, Handley said.

"We learned from our last experience with BHP (waiting until after the permits are in place is to get value-added jobs), it's a tough road. We have to sort it out up front."