Yellowknife (Sep 24/03) - DeBeers Canada will likely agree to buy electricity for its Snap Lake diamond mine from a proposed hydro plant on the Taltson River.

"They seem co-operative on hydro electricity," Finance Minister Joe Handley told about 20 people who turned out Monday for his Weledeh constituency meeting.

DeBeers officials are scheduled to meet today (Wednesday) with Northwest Territories Power Corporation and the Akaitcho Business Development Corp. to discuss the project.

The proposed project would be in addition to a hydro project on the same river servicing Fort Smith.

The international diamond company signed a letter last spring agreeing to buy electricity for its Snap Lake mine if it could be delivered at a cost competitive with power from diesel generators.

Hydro electricity may be the biggest long-term benefit from resource development in the Northwest Territories, Handley said.

Electricity from generators on the Bear River could power all the compressor stations on the proposed Mackenzie Valley natural gas pipeline with enough left over to light every community from Inuvik to Fort Simpson, Handley explained.

Northerners will get few pipeline construction jobs, Handley said.

"There is a lot of specialized work, but not many Northerners are qualified and there isn't time to train them. Handley said.

"The pipeline won't be a large employer for us. The biggest benefits will come from exploration for oil and gas over the next 30 or 40 years."

If the pipeline isn't built, "a lot of other things collapse. A road up the Mackenzie Valley could not proceed without it," Handley said.

Handley was also optimistic that DeBeers would agree to support the developing diamond polishing industry with gems from Snap Lake.

The company reneged

The company has reneged on an earlier commitment to process some of the diamonds in Yellowknife, but Handley said "I think they will find a way to do it."

Although Premier Stephen Kakfwi threatened to block the project unless DeBeers agreed to process some of the Snap Lake diamonds here, Handley said there is little the territorial government can do.

"We don't issue permits, we have no real authority," Handley said. "DeBeers can thumb their noses at us, but that will change with devolution." The transfer of federal power over resources to the territorial government was to have been completed by next year, but is behind schedule, he said.

The territorial government could tax the Snap Lake mine, but Ottawa would only claw back most of the money, he said.

"A tax is a possibility, but we don't want to do that at this time," Handley said.

The finance minister also said diamond cutting and polishing jobs are relatively minor benefits from the mines that have triggered a boom in the territories.

"The jobs are boring and they don't pay that much," Handley said.

"We always wanted to get beyond cutting and polishing and move toward trading in diamonds and making jewelry."