"We can't compete with the size of stones they cut in Bombay," said Yellowknife Chamber of Commerce president Garth Malakoe.

"There's definitely a threshold below which wouldn't be profitable here."

Because of its low labor costs, India has become a centre for the cutting and polishing of small diamonds (less than half a carat). The size and type of diamonds cut there will sell, once cut and polished, for roughly $20.

"We can't afford to do it (cutting and polishing of smaller low-quality stones) in Canada," said Mayor Dave Lovell. "I don't think the profits are all that good, but they're there."

Lovell agreed the key to making the cutting and polishing of diamonds economic in the territories is to focus on bigger stones.

Malakoe said labor costs in Yellowknife are comparable to those in Antwerp, where the threshold of profitability for rough stones is two carats in size or better.

Lovell also said profits from cutting and polishing would be maximized if combined with jewellery production.

Both agreed that the territorial government's announcement that it wanted to buy 10 per cent of BHP's production from its Ekati mine to establish a Northern diamond industry had an impact on their reception.

"There's quite a bit of interest there in what's going on in the North," said Lovell. "I think it's because our trip coincided with the GNWT's announcement. Suddenly, everyone took notice."

The delegation was front-page news in Antwerp, and Lovell and Yellowknives Dene representative Darrell Beaulieu were guests on a local TV talk show.

"Because we had been away for three days, some diamontaires knew more about what was happening in Yellowknife than we did," said Malakoe. "Clearly there's relationships between diamontaires in Belgium and people in the Northwest Territories.

"The bottom line is we can do it," added Malakoe. "There's no doubt in my mind we can have a secondary diamond industry here."