Yellowknife (Oct 01/03) - The deal the territorial government wants with De Beers Canada looks like small change beside its parent company's arrangement with Botswana.

In 1969, De Beers and the Botswana government split the world's richest known diamond deposit down the middle, 50-50.

With the stroke of a pen, the small African nation became half-owner of a flow of gems valued at $2.1 billion a year.

Premier Stephen Kakfwi is insisting that De Beers Canada honour a verbal agreement to provide 10 per cent of the diamonds from the Snap Lake mine to cutters and polishers in the Northwest Territories.

The diamond money gives Botswana a per capita income of $170,000 a year, the highest in Africa, but has done little to shield the country from poverty and disease: 47 per cent live below the poverty line and 1.7 million are afflicted with HIV-AIDS, according to a story published last year in the Guardian newspaper.

Continued development of Botswana's diamond deposits has dislocated indigenous populations from the Central Kalahari Game Reserve and incited charges that De Beers is dealing in conflict gems.

The story has been carried in major British newspapers. De Beers and the Botswana government deny the allegations and its position is supported by some international rights organizations.

Details of the De Beers-Botswana deal are not available. But when De Beers withdrew from Angola over the conflict diamond issue, it described its arrangement with Endiama, the Angolan state diamond company.

MBendi, Africa's leading business Web site, reports that Endiama got a $50 million loan to finance mining development in the Cuango Valley and a commitment from De Beers to spend $50 million to search for primary kimberlite sources.

For its part, De Beers got an agreement to market all the diamonds from the Cuango, just as it markets all the diamonds produced by Debswana, the company it jointly owns with Botswana.

So far, De Beers has spent $476 million to buy out the interest of Winspear Diamonds and Aber Resources in the Snap Lake deposit. The mine is scheduled to begin production in late 2006 and be in full production by late 2007.