Diavik Going Online Early

December 3, 2002

Diavik Going Online Early

Despite regulatory battles and soggy ice roads, Canada's second diamond mine is shaking gems loose from the tundra and is expected to begin full commercial production two months ahead of schedule, reports the Canadian Press. "We're sending kimberlite up to the plant and we're now producing diamonds," says Tom Hoefer, spokesman for Diavik Diamond Mines Inc.

It will take until February for full production at the $1.3-billion mine in the Northwest Territories, now about 97% complete, Hoefer says. That's still 60 days ahead of the projected April opening date. It will also take a few months to see if Diavik's actual production lives up to the expectations of the bulk sample. "Not all parts of the [kimberlite] pipe are equally rich," he says.

The opening of Diavik is the culmination of nearly a decade of political and environmental work often hindered by the unpredictable weather. Diavik, owned 40% by Toronto's Aber Resources and 60% by London-based Rio Tinto PLC, filed its project description in 1998.

The plan – to dam part of a northern lake at the head of the Coppermine River and mine kimberlite ore on the lake bottom – alarmed environmentalists, especially after the federal government ruled no panel review of the project's environmental assessment would be held. A new federal policy required all new mines post bonds to ensure enough money would be available to clean up the site after the ore was exhausted. Eventually, Diavik agreed to put up about $130 million, the largest such bond ever posted.

The builders also had to cope with two unusually warm construction seasons that limited the use of the ice road to the site – the only feasible way to move heavy construction material 300 kilometers from Yellowknife northeast across the tundra. Along the way, the project budget ballooned from $875 million to $1.3 billion.

But 7,200 truckloads later, everything is in place, says Hoefer. The site includes accommodations for more than 300 workers, diesel electricity and heat generators, water and sewage plants, the 11-story-high diamond process plant, a truck shop with 10 bays big enough for 240-tonne trucks and an airstrip that can accommodate Boeing 737s. The dike holding back the waters of Lac de Gras uses four million tonnes of rock and stretches nearly four kilometers.

About 700 workers remain on site, finishing the buildings and starting to remove the construction facilities, some of which came from as far away as California. By February, that work force will have shrunk to about 500, about half of whom will be on-site at any one time.

However, the mine's completion adds to the urgency of northern environmental planning, says Kevin O'Reilly of the Canadian Arctic Resources Committee. In an area that was trackless wilderness a decade ago, there are two large diamond mines and another two in the works. As well, there are proposals for a permanent road into the area and a deep-water port along the Northern coast, which would lead to the opening of other mines. "There's a number of other proposals on the table and we still don't know what the cumulative effects will be," O'Reilly says. "There is still no plan to deal with them."

Diavik, Canada's second diamond mine. is located 300 kilometers northeast of Yellowknife and is expected to have a mine life of 20 years. Its annual diamond production is expected to peak at just over six million carats and average diamond value was originally projected to be US$62 per carat, reports the Canadian Press.

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