Mining group De Beers insists it is “in the Northwest Territories for the long term” despite withdrawing financial support for Yellowknife’s Long John Jamboree festival.
De Beers previously paid tens of thousands of dollars as the title sponsor of ice carving contest Inspired Ice, which attracted entrants from across the globe.
On Monday, festival organizers confirmed De Beers would not be sponsoring any elements of this year’s festival. The 2016 ice carving contest has been cancelled and other events could be threatened.
Read: Long John Jamboree ‘to scale back’ after De Beers pulls out
Tom Ormsby, speaking on behalf of De Beers Canada, said market conditions made the decision to pull out “very difficult” but unavoidable.
“It’s not just about the Long John Jamboree. The challenge the current market is giving us, everyone in the NWT is fully aware of it,” Ormsby told Moose FM.
De Beers suspended operations at its unprofitable Snap Lake mine late last year and is now relocating many staff from Yellowknife to a new headquarters in Calgary.
The company is, however, building the new Gahcho Kue diamond mine in the NWT. Gahcho Kue is an open-pit mine, unlike Snap Lake’s challenging underground environment, and is said to have a better chance of turning a profit.
“We have three remote sites right now [including Ontario’s Victor mine],” Ormsby continued. “Only one is generating any revenue. The two in the NWT are not – one is in ‘care and maintenance’ and the other is under construction.
“Our resources are stretched and, with what we’ve got left, we want to make sure we can try to make the most positive impact possible across a lot of commitments. It was a very difficult decision for us and it wasn’t taken very lightly at all.”
December 2015: Snap Lake closing indefinitely, mining stops
According to a statement from organizers, the loss of De Beers as a sponsor leaves a $30,000 hole in the Long John Jamboree’s budget.
De Beers told us it has yet to commit funding to any similar projects, events or causes this year. “That’s still under review right now. We’re still having those meetings here in the office,” said Ormsby.
On Monday, organizer Adrian Bell – also a Yellowknife city councillor – queried De Beers’ decision to halt its festival funding, suggesting the mining giant had “shifted … the way they view their corporate responsibility”.
Ormsby argues that is not the case.
“That’s unfortunate that someone would even consider that as our position. We’ve got the world’s largest new diamond mine under construction in the NWT and that’s requiring an awful lot of capital and intensive investments – and it’s not returning any money,” he said.
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“And Snap Lake, as everyone knows, has not been in a profitable position since it opened seven years ago, yet we still make investments in the NWT and other parts of Canada with what we have left. We’re in a difficult situation – over 400 people have lost their jobs. We’ve got to use our resources in the most effective way possible.
“We’re in the Northwest Territories for the long term. When we have the resources, our goal is to do what we can for the communities in which we operate. But there are times like this when the company has to pull ourselves out of a difficult spot. We’ve got to do the best with what we have available.”
De Beers is set to publish its year-end financial results next month, while the Long John Jamboree is scheduled for March 25-27.
Ormsby said it was not possible to provide more than two months’ notice to festival organizers as events had moved quickly since the suspension of mining at Snap Lake, with affected staff and communities the priority.