CARAT LAKE, Nunavut (CP) - With a lone caribou on site bearing witness, Prime Minister Stephen Harper officially opened Nunavut's first diamond mine Thursday.

Harper said Tahera Diamond Corp.'s (TSX:TAH) $120-million Jericho mine will help bolster the northern economy by creating jobs and attracting investment. "Mines like Jericho are making Canada one of the largest and most important diamond producers in the world," Harper said outside the mine's processing plant, which towers over the tundra.

"There are currently 180 employed at this mine. This type of success will help build a new North, paving the way for new and exciting business enterprises.

The facility crushes and sifts through 2,000 tonnes of kimberlite per day to yield about 2,000 carats of diamonds.

The stones are then purchased and marketed by New-York-based jewelry giant Tiffany & Co.

The open-pit mine, about 400 kilometres north of Yellowknife, has been operating since January and began commercial production last month.

In June, miners found a marble-sized 59-carat diamond worth about $400,000.

They hope to find more.

Premier Paul Okalik said the Jericho mine will draw international attention to Nunavut and lead to more investment and development of the territory's mineral riches.

"It is very symbolic that our first mine that has ever opened in our territory is a diamond mine. It's a gem," Okalik said with a smile.

"Hopefully in the long run we will see more mining activity that will reduce our dependence on the national government. It creates opportunities for our young people."

Tahera's Jericho operation is Canada's third diamond mine.

The Ekati and Diavik diamond mines are located just over the Nunavut boundary in the Northwest Territories.

Together those two mines produced more than $1.7 billion worth of diamonds last year.

Later in Yellowknife, local reporters challenged Harper to explain when his government would approve a revenue-sharing deal that would allow the territories to keep a significant amount of resource development money.

Virtually all that money now flows to Ottawa.

"We hope in the next year to sit down with all the provinces and territories and make some proposals on new revenue-sharing arrangements," Harper said.

"We are commited as a government to make sure that we are not hoarding too much money in Ottawa. I would hope that in the next few months that we will at least be able to put some proposals on the table. It will be interesting to see at that point what the reaction is."

Harper drove by a few dozen protesters carrying signs saying "Fry fish, not the climate" and "Keep Kyoto" on his way to attend a government dinner with N.W.T. Premier Joe Handley.

There are at least three more diamond mines being planned in Canada.

They include the Snap Lake and Gahcho Kue mines in the Northwest Territories and the Victor mine in Ontario.

It's estimated the Jericho mine will produce more than 375,000 carats of diamonds per year over seven to nine years.

Canada is now the world's third-largest producer of diamonds by value.