Doug Ashbury
Northern News Services

NNSL (Jun 02/99) - When it comes to a supply of rough diamonds, the territorial government wants more than a handshake from Diavik Diamond Mines, Economic Development deputy minister Joe Handley said.

The GNWT wants the federal government to require Diavik to supply Northern companies with rough diamonds.

"Our position is unchanged. There is, in the environmental assessment guidelines, a requirement for consideration of socio-economic and value-added issues," Handley said.

"Rough diamonds must be made available for secondary industry (sorting, cutting and polishing). We want to negotiate a fixed amount. We want this in the form of a signed agreement," he said.

"We can't keep exporting raw materials out of the NWT and expect to have a viable economy."

Handley's comments are a response to a May 25 letter written by Diavik Diamond Mines new president Stephen Prest to Indian Affairs and Northern Development Minister Jane Stewart.

In that letter, Prest writes: "Media reports have circulated to the effect that the GNWT will be seeking the support of the government of Canada to recommend through the comprehensive study report that the approval of the Diavik project be linked to secondary economic activities."

When Environment Minister Christine Stewart makes her decision on whether or not to give the proposed Diavik diamond mine the go-ahead, it is the 300-page comprehensive study report that the decision will largely be based on. The report is based on the project's environmental review process.

Linking the environmental assessment and secondary diamond industry is inappropriate, Prest said, partly because the project's corporate structure precludes from entering into any agreement.

"We're not asking them to make a deal on behalf of (partner) Aber. We're talking to Aber. We know we have to deal with different owners," Handley said.

Prest also said Diavik has operated over the past four years on the assumption that the project was being assessed on its own merits. He also said Diavik stands behind its commitment to optimize value to Northerners and shareholders.

Permits for the mine could be given later this year.

DIAND has said it would only mention secondary diamond industry, but not address it, in the comprehensive study report.