Dane Gibson
Northern News Services

NNSL (Jun 11/99) - Yellowknife Mayor Dave Lovell says diamond- cutting and polishing plants such as Sirius Diamonds must be given every opportunity to flourish in the North.

"We have to start somewhere and Sirius is our foot in the door. Someone has to be cutting and polishing diamonds first," Lovell said. "After that, there will be many companies to follow, provided we get an adequate supply of rough diamonds."

The Department of Resource, Wildlife and Economic Development currently has 10 proposals from companies wanting to set up cutting and polishing plants.

While BHP has made enough rough diamonds available to supply four cutting and polishing plants, Diavik still hasn't committed themselves to supplying a set amount of rough diamonds to Northern operations.

Lovell figures the Sirius plant will pay about $14,000 a year in property taxes. As similar operations open up, the benefits to the North will increase substantially. That, according to Lovell, is why it's important for Diavik to agree to supply Northern companies with rough diamonds.

"The first $14,000 is the start of a multiplier effect. If Sirius has employees who buy houses at an average cost of $150,000, that's another $15,000 in taxes a year. The employees also buy products here and send their children to school here," Lovell said.

He said the success of diamond cutting and polishing in the North depends on the availability of rough diamonds.

"It is crucial to keep this viable secondary industry in the North. If we don't, it's like saying we're not going to allow oil refineries in Alberta," Lovell said.

"With extraction, we must have manufacturing, not just for Yellowknife, but for the territories and Canada. Shipping the lion's share of rough diamonds to Antwerp should not be an option."

Diavik spokesperson Tom Hoefer said the company has told the GNWT that it will consider sales of a proportion of it's 60 per cent production to NWT customers -- provided that it makes good commercial sense.

"As (Diavik) production will not occur for some years hence, Diavik's marketing plans are still evolving," Hoefer said.

"In the meantime, Diavik has offered to share its expertise with the GNWT and to exchange marketing information with them in order to explore value-added options that would benefit both parties."