Richard Gleeson
Northern News Services

Yellowknife (Feb 20/02) - DeBeers, the world's biggest diamond company, continues to balk at polishing diamonds in the NWT, says Premier Stephen Kakfwi.

Territorial government attempts to have the South African giant contribute to the development of a secondary Northern diamond industry have resulted in little more than frustration.

Following meetings in London last week, Kakfwi said DeBeers is still refusing to follow the path taken by BHP and Rio Tinto, owner of the North's first two diamond mines.

"They're huge and they're going to be tough to deal with, no doubt about it," Kakfwi said yesterday in a telephone interview from Berlin.

DeBeers hopes to develop the first underground diamond mine in Canada at Snap Lake. Small compared to Diavik and Ekati, the project is currently undergoing an environmental review.

Kakfwi met with leaders of the Diamond Trading Company, formerly known as the Central Selling Organization. All of the rough diamonds produced by DeBeers mines, some 80 per cent of world's supply, are sold through the Diamond Trading Company, a subsidiary of DeBeers.

They have not budged from the position it took four years ago. In the winter of 1998 company official George Burne said the North should stick to what it does best, mining.

DeBeers has refused to allocate a portion of the rough diamonds produced by the mine to Northern cutting and polishing companies. Kakfwi said the company is also refusing to distinguish its Canadian diamonds from any of the other diamonds it produces. Those include so-called "blood diamonds" from mines in war-torn places such as Sierra Leone.

DeBeers Canada Mining spokesperson Judy Langford referred questions about the branding of diamonds and allocation of rough to Northern Manufacturers to the Diamond Trading Company. Because of the time difference between London and Yellowknife, officials were unavailable for comment by deadline.

When BHP initially balked at a government request to provide rough diamonds to Northern manufacturers, then finance minister John Todd threatened to introduce a tax regime that "would choke a mule."

Kakfwi said he is determined to reach a negotiated solution.

"Someone once said, before you take out the tomahawk you have a peace pipe," the premier said.

"You've just go to hope with everything you have that that's going to work every time.

"That's what I believe in."

The government also wants DeBeers to raise its profile in the NWT.

Initially, DeBeers set up its office in Vancouver, a move Kakfwi said was "an insult and unacceptable."

Last year, a year after Kakfwi said he requested the company do so, DeBeers established an office in Yellowknife. But there is no exterior sign indicating DeBeers' presence.

"At the moment we don't have a sign on the Scotia Centre (where the office is located)," said Langford.

"By the same token, BHP doesn't have a sign on the Precambrian building."

Kakfwi said the company has agreed to follow through on a commitment it made to him two years ago to erect an exterior sign on its office indicating DeBeers presence in the North.

Langford said discussions between the company, city and territorial government are ongoing.

The premier said it is important that the world's biggest diamond company have a presence in the NWT capital, a place the city and territorial government are promoting as "The Diamond Capital of North America."

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