Richard Gleeson
Northern News Services

NNSL (Jun 07/99) - The federal government is counting on Diavik's good will for a supply of rough diamonds for Northern-based cutting and polishing businesses.

"It's up to (Diavik)," said Jim Moore, assistant deputy minister of DIAND's Northern Affairs program.

"...I would think that Diavik, when it listens to the federal government and the territorial government and others advocating that rough be made available, it would be very likely to follow through and make rough available."

The territorial government's lead official on diamonds said Diavik's decisions are based on its bottom line, not on good will.

"If we leave it up to Diavik it will probably result in zero," said Joe Handley, deputy minister of Resources, Wildlife and Economic Development.

Handley said Diavik is accountable first and foremost to its shareholders, adding that diamond mining companies that take a charitable approach to business don't remain in business long.

After unsuccessfully lobbying to have secondary diamond industry addressed in the environmental review of the proposed mine, the territorial government is hoping to secure a supply of rough in a socio-economic agreement it is currently negotiating with Diavik.

Diavik spokesperson Tom Hoefer said, "Where it makes good business sense, we will be selling in the North.

"We respect the GNWT's desires on value-added," said Hoefer. "We're aware of what they're trying to achieve and that it's a good cause, to try to get even more benefits for the North out of the substantial benefits that mining can already provide."

Handley said the territorial government, because it does not have the same authority as provincial governments, needs the federal government to exercise some of its authority for a deal to be worked out.

Moore responded with an unqualified "no" when asked if the federal government would compel Diavik to supply rough diamonds to Northern manufacturers, but added "We support value-added industry in the North.

"We think it is very important to the development of the economy."

Handley said that support has not been reflected in federal action.

"They're doing nothing on it (secondary diamonds)," said Handley. "They have a task force, but I haven't seen one word of print on it."