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VANCOUVER -- Consumers have long been dazzled by the glitter and glamour associated with diamonds. Perhaps it's because buyers have lusted so greatly for these precious stones that they've overlooked their origins. But in a day and age when lobbyists have turned fur coats and


cross-trainers into politically charged material items, it's not surprising that diamonds have finally come under the gun from human rights activists.

The industry has been beset by the controversy surrounding "conflict" or "blood" diamonds, gems that come from war-torn countries in Africa. In addition to activists, the

United Nations

, the

World Bank

and Washington politicians also are taking a stand against the trading in illicit diamonds -- which helps to finance many of the civil wars on the continent. On Monday, campaigners in the U.S. called for an embargo on stones from six countries: Zimbabwe, Liberia, Burkina Faso, Ivory Coast, Togo, and the Democratic Republic of Congo.

Not wanting to get caught up in a consumer backlash, the industry has been quick to respond and is poised to establish tougher standards for the diamond-trading business. At the center of all of this activity has been

De Beers Consolidated Mines


, the world's largest and oldest diamond producer. Last week, the company announced a number of measures intended to maintain consumer confidence, increase worldwide demand for the gems, and establish "globally recognized distribution channels."

The moves are considered to be the biggest overhaul for De Beers since the 1930s. De Beers shareholders -- and De Beers-invested mutual funds such as the

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The South Africa-based company is a prominent player on the global stage, and its shares also are quoted on stock exchanges in London, Paris, Frankfurt and Geneva. The firm also has a pronounced presence in Canada, with an office in Vancouver, and several exploration projects already under way in Saskatchewan, Ontario and the Northwest Territories.

But it's the company's hostile takeover bid for

Winspear Resources

that underscores De Beers' unflinching effort to ensure it is recognized north of the border. Winspear, a Vancouver-based junior mining company that trades at roughly C$4.50 ($3.04) on the

Toronto Stock Exchange

, holds a 67% stake in the Snap Lake project in the Northwest Territories. The venture is shaping up to be Canada's first underground diamond mine, and possibly, a huge entry point in North America for De Beers.

"If you look at the change in their strategic focus, to being a supplier of choice, it fits nicely," says a mining analyst with a Vancouver-based brokerage who asked to go unnamed. "And there's no problem with any of these blood diamonds in Canada."

The Vancouver office of De Beers didn't return a


request for comment. Winspear officials directed


to already-issued statements.

Indeed, the country that finished first in the

U.N. Human Development Report 2000

seldom draws the wrath of social activists, at least relative to some of the troubled diamond-producing nations in Africa that De Beers now needs to distance itself from.

In Canada, De Beers might be better-identified with Maple Leaf rouge than blood red. More importantly, it has found for itself an important diamond-producing country for the future. And best yet, it's situated next door to the U.S., whose jewelry-happy citizenry makes up De Beers' No. 1 national customer.

But Winspear refuses to roll out the carpet for the gem behemoth. Since De Beers' late-June offering, the two have been engaged in a war of words, much of it taking place via press releases, issued statements and the companies' respective Web sites. De Beers would like to see shareholders accept their offer and be done with the matter. Winspear argues that its Snap Lake project is valued much higher than what De Beers is willing to pay.

"We are confident that our shareholders will conclude that the De Beers offer is unacceptable," said Winspear president and CEO Randy Turner on Monday. Canuck translation: "Take off, hoser."

Winspear's insistence that better suitors exist rings hollow to some, however. "We don't see a white knight standing in the wings to make a competing bid," says Calgary-based analyst Art Ettlinger of

Yorkton Securities

, who maintains a C$7 target on Winspear. "Winspear has been trading at a discount for a while. If someone else wanted to make a run at it, they had their opportunity." Yorkton has an investment banking relationship with Winspear.

It's ironic that in its quest for conflict-free stones, De Beers has given rise to a nasty skirmish in the Canadian diamond industry. If shareholders decide to go with De Beers' offer, a disgruntled Winspear management eventually might refer to the behemoth's Canuck offerings as blood diamonds as well.