Richard Gleeson
Northern News Services

Yellowknife (Mar 15/02) - Local diamond factories are not buying the full supply of rough diamonds BHP has made available to them.

Just how much of the $85 million supply the three cutting and polishing plants used last year remains a mystery. The plants operate under private contractual agreements with BHP.

On Monday Premier Stephen Kakfwi reported that owner of Ekati mine had lived up to an informal agreement it made with the territorial government by offering local plants 10 per cent of the mine's 2001 production.

Questioned by Yellowknife MLA Charles Dent Wednesday, Economic Development Minister Jim Antoine said the city's diamond cutting and polishing plants did not purchase all the rough diamonds.

Antoine said he would find out how much of the $85 million was polished in the North. He added that Diavik diamonds will be added to the mix once that mine goes into production.

"There is a commitment on their part to supply approximately the same amount of diamonds that are available from BHP," Antoine said.

With the prospect of jobs in oil and gas and at the mines, developing a local cutting and polishing labour force is proving more challenging and expensive than ever.

A diamond adviser to the territorial government said the plants -- Sirius Diamonds, Deton Cho Diamonds and Arslanian Cutting Works -- are also affected by such factors as fashion trends in the diamond industry and BHP's mine plan. Under the plan, annual production varies as different pipes are mined.

"They've got to have flexibility (in supply) to be able to grow and expand," Martin Irving said.

The territorial government is currently attempting to persuade De Beers, owners of the Snap Lake diamond mine, to provide a share of its production to northern manufacturers.

De Beers has so far refused to enter the negotiation, Antoine said.

"I understand that through the regulatory process there are socio-economic agreements they have to reach, so we have some options in there," he later added.