Doug Ashbury
Northern News Services

NNSL (Jun 16/99) - As the Diavik diamond project is amid its final stages, the NWT government is again asking the federal government to require Diavik to sell some of its diamonds to Northern-based manufacturers.

"The GNWT is requesting that socio-economic benefits, including value-added requirements, be resolved before the Comprehensive Study Report is finalized and certainly before a licence is issued," Premier Jim Antoine wrote in a June 7 letter to Indian Affairs and Northern Development Minister Jane Stewart.

"It is important that we do not again find ourselves in a situation where we have to threaten to stop development in the North to facilitate an agreement on these matters," Antoine said.

The GNWT and BHP Diamonds were able to agree on a supply of rough diamonds for Northern companies. But that agreement came after the company was given permits. This time, the GNWT wants Diavik's owners, Rio Tinto subsidiary Diavik Diamond Mines, and Canadian mining company Aber Resources, to supply rough diamonds to Northern companies before permits are issued.

With a guaranteed supply of rough diamonds, the NWT will be better positioned to attract diamond-cutting and polishing plants.

Antoine also said, "In the absence of a federal commitment to value-added processing of diamonds in the North, the GNWT has little bargaining power in negotiations with Diavik on off-site sorting and valuation, and a guaranteed supply of rough diamonds.

"In our negotiations with BHP, the GNWT had to resort to threats of higher taxation to arrive at a common understanding with the company," which was unsatisfactory, said Antoine.

"The argument that imposing such conditions on the sale of rough diamonds would contravene international trade agreements is without merit," Antoine said. He cited several examples of where regulations have been used to ensure further processing of raw materials in the jurisdiction of origin.