Lack of Supplier Commitment Causes Leviev to Drop Sirius

“It simply proved impossible to reach a deal with any of the diamond firms for a supply of rough and without those commitments nobody can invest in a business and hope to grow it,” a senior source at Leviev's LLD told IDEX Online.

A spokesman for Diavik said Leviev did not meet the firm's commercial criteria although he declined to comment on which criteria Leviev failed. Meanwhile, BHP Billiton, the owner of Ekati, said Leviev requested the supply of more diamonds than Ekati could supply.

Without a supply of rough diamonds, Leviev pulled out of negotiations last week, said the source, confirming Canadian diamond mines refused to commit to a deal to supply the plant.

Last September, the NWT government chose the Lev Leviev Group to buy the plant due to its size and successful operations worldwide after receiving five proposals for the purchase of the plant.

NWT Finance Minister Floyd Roland said Leviev had exceeded the threshold payment of CA$6.5 million ($5 million) for the plant, but wouldn't say exactly how much Leviev had agreed to pay.

The NWT government has now begun a new search for a buyer for the Sirius plant which it forced into receivership last summer.

Sirius Diamonds went bankrupt after the government called in CA$8 million ($6.1 million) in government-guaranteed loans.