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Snap Lake diamond mine’s future threatened

The NWT’s Snap Lake diamond mine could be forced to close as pressures on the industry mount.

The mine, operated by De Beers, faces a global dip in the price of diamonds and company restructuring issues. Moose FM understands some employees expect their jobs to go.

Opened in 2008, Snap Lake was De Beers’ first diamond mine outside Africa. It had been expected to operate for two decades.

De Beers’ Tom Ormsby told the CBC closure was only one of several options, but a “care and maintenance situation” at Snap Lake was possible.

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Many De Beers staff in the Northwest Territories were affected by the company’s recent decision to relocate some employees from the NWT to a new headquarters in Calgary, which is planned to open next year.

Employees set to move to Calgary may now face losing their jobs instead.

Groundwater problem

Higher than expected volumes of dissolved solids in the groundwater at Snap Lake have made mining a more difficult proposition than initially anticipated.

The mine spent the past year arguing for an amendment to its water licence to account for the unexpected levels of dissolved solids – an argument it largely won.

In the course of making those representations to regulators and government, De Beers painted a portrait of a challenging operating environment at Snap Lake. More than once, the company said its mine would be threatened with closure if the changes demanded were not made.

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In the course of 2014, the company claims it spent $126 million with NWT businesses. So far, opening and operating the mine has cost De Beers more than $2 billion.

‘We must work in partnership’

The news comes as another NWT diamond mine, Diavik, proudly showed off one of the largest diamonds ever discovered in Canada earlier this week.

Diavik’s owner, Rio Tinto, says a 187.7-carat rough diamond dubbed the “Diavik Foxfire” was discovered earlier this summer.

“It brings visibility to Diavik, all the people that work at Diavik, and it brings focus to the North,” said Marc Cameron, Diavik’s president, who unveiled the diamond at London’s Kensington Palace on Wednesday.

Diavik Foxfire
A photo of the Diavik Foxfire diamond issued by Rio Tinto.

“This is an exceptional diamond. Its two-billion-year journey is only just beginning in many respects. Because of its size and the fact that it is gem-quality, it is truly an amazing stone.

“We’ve been operating now for over 12 years at Diavik, we’ve recovered just under 100 million carats, and this is our largest find.”

Reacting to the current state of the diamond industry, Cameron urged the new territorial government to work collaboratively with the mines.

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“It is the backbone of the North. We must work in partnership to move forward, bring visibility to the industry, and support exploration in the North,” Cameron told us.

“That’s what we truly need, exploration to bring new mines online.”

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