The company's head of corporate development, Douglass Rabbetz is "confident" that the company will set up shop in Yellowknife.

The Calgary-based company, whose principals are Belgian, was looking at setting up the operation in Calgary.

But Rabbetz, and other Canadian Diamonds International executives were in Yellowknife last week "to examine the possibility of setting up" in the North and have since changed their mind.

"We're very impressed," said Rabbetz, after the visit which was at the request of the GNWT.

While here, they met with Joe Handley, co-chair of the federal territorial task force, with representatives of Aurora College and aboriginal groups, as well as members of the Yellowknife diamond task force.

The company estimated it will need 360 square metres (4,000 square feet) of space for a diamond- cutting and polishing factory.

If it goes ahead, the factory will be two years in the making and employ 32 people.

The company must first train about eight people to cut and polish rough stones, Myrna Higgs, the company's vice-president of administrative and corporate affairs, said.

The 32 jobs represent only a portion of employment that could be generated from BHP's rough gem quality stones, Canadian Diamonds International vice-president, research and development Laurent Martens added.

Martens, a robot engineering consultant who has developed laser software for diamond shaping, said just one-tenth of BHP Diamonds' gem-quality stones could generate about 300 diamond-cutting and polishing jobs as well as another 50 or 60 related jobs.

He estimated about 20 per cent of the rough diamonds produced by BHP will be gem quality.

Canadian Diamonds International's president and CEO is Herman Habraken. Habraken, has 20 years of experience in diamond manufacturing. His Belgian diamond company manufactures diamonds for the Japanese market.

Part of Canadian Diamonds International's plan will likely be to acquire Canadian rough stones.

Last week, the GNWT said it wants to buy up to $50 million a year worth of rough diamonds to nourish the development of a Northern secondary diamond industry.

The NWT Cabinet has approved the purchase of up to 10 per cent of BHP's diamond production.

Nothing new offered, says GNWT The GNWT says it offered Canadian Diamonds International incentives beyond what the government already provides to business. "The only programs we showed them or talked to them about are existing programs," said GNWT director of diamonds Martin Irving. Among the programs discussed, said Irving, was cash available under the Business Development Fund and apprenticeship and training on-the-job wage subsidies available through the Department of Education, Culture and Employment. Asked if the topic of tax breaks arose, Irving replied, "That was not discussed."