New projects improve diamond supply outlook
October 24, 2013
New York--Amid industry concerns about the dwindling supply of diamonds, a number of announcements surfaced this week regarding new projects that will open up additional sources for mining the stones.
On Tuesday, De Beers Canada and Mountain Province Diamonds announced that the Canadian federal government had approved development of the Gahcho Kué diamond mine in the Northwest Territories.
The Minister of Aboriginal Affairs and Northern Development, Bernard Valcourt, put his stamp on the project, which will pave the way for the Mackenzie Valley Land and Water Board to begin processing applications for water and land-use permits.
“The minister’s approval confirms that the plans for the development and operation of the Gahcho Kué diamond mine will benefit the economy and residents of the Northwest Territories and enhance Canada’s position as a premier diamond producer,” De Beers Canada CEO Tony Guthrie said in a statement.
Located 280 kilometers (174 miles) northeast of Yellowknife, Northwest Territories, the mine is a joint venture project of De Beers (51 percent) and Mountain Province (49 percent). Gahcho Kué will employ nearly 700 people during its two-year construction process and approximately 400 while operating. It’s predicted to produce an average of 4.5 million carats per year over its 11-year life.
De Beers also has started construction of a new underground mine below its open-pit Venetia Mine in Limpopo Province, South Africa. The company has invested $2 billion in the project, which will extend the life of Venetia beyond 2040.
Underground production is slated to begin in 2021. De Beers expects the mine to produce an estimated 96 million carats over its lifetime. It will create 8,000 jobs directly, as well as 5,000 more through the supply chain.
“There can be no greater vote of confidence by our shareholders in South Africa and De Beers than the decision to build an underground mine of the future here at Venetia, one of a handful of world-class diamond mines around the world,” said Philippe Mellier, CEO of the De Beers Group.
“With production set to continue into the 2040s, Venetia will support South Africa’s mining economy for generations to come and make diamond moments possible for millions of people around the world.”
Meanwhile, Canada’s Dominion Diamond Corp. announced Wednesday that it has filed an application with the Wek'éezhìi Land and Water Board for a new land use permit and water license to expand its Ekati Diamond Mine to include the Jay and Cardinal kimberlite pipes (the Jay-Cardinal project).
The application is the first step in the regulatory approval process for the project. Environmental assessment approval is anticipated before the end of 2015, after which construction would begin, allowing for the anticipated release of diamond-bearing kimberlite to the process plant by 2019.
The Jay and Cardinal kimberlite pipes are located in Lac du Sauvage in the southeastern portion of the Ekati mine property. Drilling at the Jay site to date has produced 78 million carats of indicated resource and 13 million carats of inferred resource.
Dominion has identified the Jay-Cardinal project as “the cornerstone of (the company’s) strategy for building a long-term, sustainable Canadian diamonds business.”
The project has the potential to extend the operating life of the Ekati Diamond Mine for another 10 to 20 years past the current scheduled closing date in 2019.
Dominion Diamond Corp., formerly Harry Winston Diamond Corp., purchased the Ekati Diamond Mine from BHP Billiton in April, following the sale of the retail arm of Harry Winston to Swatch Group a month earlier.