Jeff Colbourne
Northern News Services

NNSL (Jul 03/98) - BHP won't be cutting any discount deals with Canadian or Northern companies wanting to purchase rough diamonds.

That could make it almost impossible for some companies to set up shop in Yellowknife.

Winnipeg-based Zimmy Diamonds is one such company. Owner Filip Zimerman, who recently returned from Antwerp, has failed in his attempts to secure a guaranteed portion of Ekati rough at a discount.

"One can get excited, one can get started, but when there's no commitment, no pricing leeway at all, it's going to make it difficult to make it work. Very, very difficult economically," said Zimerman, owner of Winnipeg-based Zimmy Diamonds.

"The word white elephant comes to my vocabulary at this point and it's going to fall on your head."

While in Antwerp, Zimerman checked out BHP's diamond-selling set-up and saw the company's no-preference policy aggressively in action.

"They're not concerned about how many Canadian jobs will be but whoever comes up with the highest bids," he said.

"Allocation from the mine is wonderful but why should the mine sell diamonds to (a Canadian company) for $1,500 a carat when they can get $2,000 in Belgium?"

When it comes to companies buying rough at market value and who wants to set up shop in the North, Zimerman is advising the territorial government not to offer them subsidies.

Instead, the GNWT and the federal government should pressure BHP to cut Canadians a deal. After all, it is a Canadian resource, said Zimerman.

Zimerman, a diamond dealer and cutter since 1965, is not giving up on a feasible, Yellowknife-based, diamond manufacturing company. He said he plans to raise greater awareness of the industry in Canada and in the coming weeks and months, if necessary, try to convince the mine to be softer with the prices for Canadian diamonds.

"Unless BHP softens up, it is not possible to come North and set up secondary industries," he concluded.

Julia Mott, former spokesperson for the Yellowknife Diamond Industry Task Force, said they cannot govern how BHP conducts its marketing and how its sales strategy evolves. That has to be a corporate decision.

"What we want to do is optimize the benefits of all parties and that's what we're doing," said Mott.

"They've been extremely good corporate citizens and they really have more or less bent over backwards to accommodate everything we want, she said.

Last month, Victoria-based Sirius Diamonds said it has been guaranteed a portion of BHP's rough diamonds from the Ekati mine and hopes to be cutting and polishing them in Yellowknife by February.

James Ben-Oliel, the owner of Sirius with his son, Stephen, said discussions were still going on, but they were hopeful and optimistic.

The company said it would hire about 30 workers in the first stages. Then it plans to add a second shift and another 20 employees.

Sirius wants to be producing shortly after BHP gets up and running in the fall.