Iqaluit (Apr 07/03) - The Government of Nunavut is looking at secondary diamond manufacturing but isn't sure yet if that will come to the territory.

"We are certainly looking at it but we haven't decided yet if it is something we want to do," said Gordon McKay, minerals' director with the Department of Sustainable Resources in Iqaluit.

The GN has held fact-finding meetings with industry regulators in the GNWT as "part of the process" of assessing a potential manufacturing strategy, he said.

"We wanted to know how this is working in NWT and it seems to be working very well.

"It is slowly developing and seems to be something that could have some potential in Nunavut.

"The time to make that decision is coming but we aren't yet at the position where we have decided what we are going to do."

Tahera's Jericho project will be the territory's first diamond mine, pending regulatory approval this spring.

The Nunavut Water Board will hold hearings May 26-30 in Cambridge Bay, Kugluktuk and Gjoa Haven on the company's environmental impact statement.

Tahera recently signed a secondary manufacturing agreement with Lazare Kaplan for 100 per cent of the mine's production.

The deal gives Tahera the right to retain up to 25 per cent of its production, however, for its own marketing purposes or to meet any requirements by the GN for local manufacture.

The company hopes to begin moving equipment into the mine site next winter.

In the NWT, the government has no set 'local manufacture' quota for diamonds mined in the territory.

A "common misconception" is that BHP and Diavik must set aside 10 per cent of their production for local cutting and polishing plants, said the GNWT's Martin Irving.

"That isn't the case and we have never put a number on it," said Irving.

"Our agreement with BHP is that they will make rough diamonds available to the three initial factories in Yellowknife. BHP came up with a figure of 10 per cent of their total production for local plants. We have never put a ceiling on it."

Irving said the GNWT's approach has been to help the plants through startup after which "they would then compete for product with other cutting and polishing works around the world."

Setting a government-imposed quota would inhibit that competition, he said.

The three manufacturing plants in Yellowknife employ 80-90 people and contribute $9-$10 million a year to NWT's gross domestic product, he said. A fourth plant, to be opened shortly by Tiffany, will employ 10 to 15 people initially and up to 75 at capacity.