Yellowknife (July 14/04) - Nearly six years after diamond mining started in the NWT, the precious stones haven't lost their lustre for retail businesses, hotels and restaurants in Yellowknife.

The NWT economy has surged forward since the Ekati diamond mine opened in 1998. Diavik followed soon after and Canada is becoming the third largest producer of diamonds in the world, according to Statistics Canada.

The sale of wholesale diamonds increased 40 per cent between 1998 and 2002, states the report.

Most of that increase was due to machinery and building supplies as well as trucking, but the effects also trickle down to smaller businesses.

"Five years ago, I opened because of the diamond industry. Otherwise I would have gone south," says Pierre LePage, owner and chef of Le Frolic and L'Heritage restaurants.

Lepage attributes approximately 20 per cent of business to diamonds, usually in the form of business executives who dine while visiting the mines -- especially at the fine dining L'Heritage restaurant on the second floor of his 49th Street building.

The construction period in mine development produces even more business, says LePage. Construction is set to begin at De Beer's Snap Lake diamond project in 2005. LePage will be ready for it.

Frank Kelly agrees with LePage about the boom during construction time.

"Business increased in the first two years while the mines were getting set up," says the manager of the Northern Lites Motel.

The effect now comes from mine employees flown in to Yellowknife from smaller communities on their way to start two-week shifts, he says.

The Capital Suites cater to a different clientele than standard hotels, but still feel the effects of NWT's two mines and the impending Snap Lake project.

"We've definitely benefitted from people looking for a place to live for a couple of months," says Tammie Sorensen, general manager.

Companies like BHP Billiton often house executives for week-long spans during visits to the mine.

Arslanian Cutting Works puts their diamond-cutting employees up in long-term suites until they can find permanent housing, she says.

In 2004, 5-7 per cent of their business was from the industry, down from 11 per cent in 2003.

Sorensen expects this year's numbers to rebound soon and stay constant for the remainder of the year.

She attributes the drop to a number of Arslanian workers finding housing elsewhere.

-- with files from Susan Catling