Yellowknife (Sep 19/03) - The president of De Beers Canada has no authority to cut a deal with the Government of the Northwest Territories on the supply of rough diamonds from the Snap Lake Project, he said Wednesday.

Richard Molyneux, president of De Beers Canada, was in Yellowknife last week to speak with Premier Stephen Kakfwi and continue ongoing negotiations concerning the development of the Snap Lake project.

Despite recent public comments to the contrary, last Dec. 6 Molyneux told the Mackenzie Valley Environmental Impact Review Board that he would supply quantities of diamonds to stakeholders.

"What I said is, yes, we would include the supply of Snap Lake production directly to stakeholders, including aboriginal groups," said Molyneux.

But since that time, Molyneux has admitted he does not have the authority to strike such a deal.

"I can't solve it. This is an issue that is core to our business practices, which have been set in collaboration in mandates from our principals," the De Beers president said Wednesday.

Speculation has it Molyneux may have had his commitment curtailed by executives at the De Beers Diamond Trading Company, based out of London, England, said Martin Irving, director, diamond projects with Resources Wildlife and Economic Development.

"If he's doesn't have the authority to make the commitment, then what is he doing making the statement?" Irving queried.

De Beers has a defined corporate culture with a defined marketing policy, Molyneux explained.

Reconciling De Beers corporate and marketing policy with the policies of the GNWT has become the crux of socio-economic negotiations, which have been ongoing for well over a year now, Premier Stephen Kakfwi said last week.

De Beers has run into trouble before as a result of what Irving calls "monopolistic practices."

Sherman Anti-Trust Act

"It has to do with the (United States) Sherman Anti-Trust Act," said Irving.

"In the late '40s and early '50s there were a series of court cases to do with De Beers' monopolistic practises. De Beers was convicted on at least one count in absentia," said Irving.

"Even to this day, De Beers executives will not travel in the United States for fear of being indicted," said Irving.

Premier Stephen Kakfwi and RWED Minister Jim Antoine have met with power brokers in London, said Irving. Those power brokers include Nicky Oppenheimer, chairman for De Beers Diamond Trading Company, Gary Ralfe, De Beers DTC general manager, and De Beers DTC sales and marketing manager Gareth Penny.

"It's clear and it's been in our policy statement that's been in existence since 1998, so it's not new. If they do not make a supply of rough diamonds available, the Government of the Northwest Territories will not approve the project," said Irving.

But the territorial government is asking for the "cream off the top" from the Snap Lake Project for their diamond-polishing industry, Molyneux argued.

"It's not whether it's a niche market, it's the cream off the top. It impacts in the sense, if we do this here, we're under obligation to do it elsewhere," said Molyneux.

Both Molyneux and Linda Dorrington, manager of public and corporate affairs with De Beers Canada, are unhappy with the manner in which the project has been reported in the media.

They characterized the supply of rough diamonds as a small sticking point in what has become a $1-billion investment by De Beers in the North.

"There is significant direct input through employment and that's really what the diamond industry is all about," said Molyneux.