Doug Ashbury
Northern News Services

NNSL (Jun 28/99) - With good news in hand from Aber Resources, Resources, Wildlife and Economic Development Minister Stephen Kakfwi will next take the GNWT's position on diamond value-added industry to Rio Tinto.

Kakfwi said the GNWT will attempt to convince the controlling owner of the Diavik project that supplying rough diamonds to Northern producers is a good idea.

Last week, Aber executives told Kakfwi they want to cut and polish some diamonds in the NWT. Vancouver-based Aber owns 40 per cent of the Diavik project.

Kakfwi will meet with Rio Tinto chairman Robert Wilson on July 5 in London. British mining company Rio Tinto owns 60 per cent of the Diavik project.

If the project becomes a mine, the GNWT wants a portion of rough stones to be made available to Northern manufacturers.

With a guaranteed supply of rough diamonds, the GNWT can attract joint ventures to set up cutting and polishing plants in the NWT.

Nothing was put on paper last week, but Aber favours cutting and polishing a "portion" of their share of diamonds from the proposed Diavik project, Kakfwi said.

Kakfwi and RWED deputy minister Joe Handley last met with Aber officials Monday hoping to get the company to support supplying rough diamonds to Northern-based manufacturers.

The meeting followed the GNWT's recent announcement that it had postponed socio-economic agreement talks with Diavik Diamond Mines Inc.

The GNWT said it was not making any progress on getting Diavik Diamond Mines Inc. officials to commit to supplying rough diamonds to Northern-based producers. Diavik Diamond Mines is owned by Rio Tinto.

"They (Aber) have said that they want to polish a portion of diamonds in the North," Kakfwi said.

"They also said they will work with us to look at other value-added opportunities in addition to cutting and polishing," he said.

"We said we would work at looking at other industry incentives."

Kakfwi, who plans to meet with Aber officials again next month, said the message he heard on sorting was also encouraging.

Diamonds must be sorted not only for government royalty purposes, but also for marketing.

Diamond sorting from the proposed Diavik diamond mine is expected to be more extensive than the sorting done here by BHP Diamonds, Kakfwi said.

Socio-economic agreement talks with Diavik Diamond Mines were put on hold until Kakfwi could meet with Aber and Rio Tinto officials.

The socio-economic agreement involves five Aboriginal organizations, the GNWT and Diavik. It is an effort to maximize territorial employment and business opportunities and expected to address secondary industry and value-added opportunities and involve monitoring and mitigating community, cultural and social effects, Kakfwi said.

Currently, the GNWT's only rough diamond supply agreement is with BHP Diamonds, part of Australian Broken Hill Proprietary Co. Ltd. BHP owns 51 per cent of the Ekati project.

Dia Met Minerals, which owns 29 per cent of Ekati, does not have a supply agreement with the GNWT, Kakfwi said.

But according to Dia Met's annual report, "one commitment to supply diamonds for manufacturing is in place and others are being discussed."