Diavik Announces Agreement With Canadian Government

March 13, 2000

Diavik Announces Agreement With Canadian Government

On March 8 the Canadian government and Diavik Diamond Mines signed an environmental agreement that will permit construction to resume at the billion-dollar mine in the country's Northwest Territories.

Diavik and Canada's Department of Indian and Northern Affairs were locked in a month-long battle over the value of environmental reclamation bonds and various land-use issues. Construction of the C$1.3 billion (US$879 million) mine, expected to eventually produce 8 million carats or 6% of annual worldwide production, halted in mid-January after the Canadian government refused to grant a key land permit. The government insisted Diavik post a bond of more than $200 million before the company could receive construction supplies.

The agreement announced last week specifies monitoring and reporting requirements, conditions for reclamation of the site and majority representation by aboriginal groups on the project's environmental advisory board.

Development must resume soon to allow construction to begin in the second quarter. Otherwise, opening of the mine could be delayed by a year because of winter weather. Diavik said it would remobilize its workforce as soon as it received land use permits.

- by Mark E. Dixon