De Beers Canada

Official openingsAfter writing last year about De BeersÔÇÖ progress towards its first diamond mine in Canada, Martin Ashcroft finally has the opportunity to cover not one, but two official openings. A long and winding road reached a milestone in July with the historic official opening of two new diamond mines in Canada. On Friday 25 July, De Beers Canada cut the ribbon on its Snap Lake mine, located 220-kilometres northeast of Yellowknife in the Northwest Territories. The very next day, the celebrations moved to the James Bay Lowlands of Northern Ontario for the opening of a second mine, Victor. These events are historic for a number of reasons. Although the name De Beers is synonymous with diamonds (the company has been involved in all aspects of the diamond business since 1888, and is recognized internationally as the industry leader) Snap Lake is the first mine to be opened by De Beers outside of Africa. ItÔÇÖs not CanadaÔÇÖs first diamond mine, of course. That honor belongs to BHP BillitonÔÇÖs Ekati mine, opened in 1998. A second diamond mine, Diavik, opened in 2002, owned by a joint venture between the Harry Winston Diamond Corporation and Diavik Diamond Mines Inc., a subsidiary of Rio Tinto Group. Both of these mines are also in the Northwest Territories.A third mine, Jericho, was opened in 2006 but closed about 18 months later after the owner, Tahera Corp., filed for bankruptcy protection. So technically, Snap Lake is CanadaÔÇÖs fourth diamond mine and Victor is the fifth. De Beers chairman Nicky Oppenheimer, grandson of Ernest, the first Oppenheimer to chair the De Beers diamond mining company in South Africa (in 1929), founded by Cecil Rhodes in 1888, rues the fact that De Beers allowed others to take the lead in Canada, but is upbeat about the future.ÔÇ£ThereÔÇÖs no doubt that when diamonds were first discovered here in Canada, De Beers missed the boat,ÔÇØ he said. ÔÇ£We did come to prospect in Canada in those days, but in some downturn of the world economy, sitting far away in Johannesburg, South Africa, no doubt myself partially responsible, we decided that Canada was a long way away and in order to save the money, we cut down our operations here. How wrong we were, and how we allowed our competitors to get ahead of us. We saw the error of our ways,ÔÇØ he continued, ÔÇ£and through Snap Lake and the Victor Diamond mine, I believe De Beers is ahead of the game.ÔÇØ So, back to No 1s. Snap Lake is the first fully underground diamond mine in Canada, and Victor is the first diamond mine in Ontario. Between the two, annual production is expected to be two million carats, 1.4 million at Snap Lake, and 600,000 at Victor.Long and winding is a description that could be applied to the process of opening any new mining operation. ÔÇ£It has taken us several years and over $1 billion to build each mine, and along the way, we have built strong relationships with local communities and upheld the highest environmental standards. IÔÇÖm very proud of what we have accomplished,ÔÇØ said Jim Gowans, president of De Beers Canada.ÔÇ£I congratulate Jim Gowans and his team for their hard work and dedication in bringing Snap Lake and Victor Mines into production,ÔÇØ said Oppenheimer. ÔÇ£It is gratifying to see not only the contribution these mines will make to De Beers but the contribution they are already making to the communities in which they are based.ÔÇØThe long and winding process of bringing new mines into operation in the 21st century is characterized by the environmental and social agreements necessary to obtain the permits. Seven impact benefits agreements had to be signed for these two projects, four at Snap Lake and three at Victor.In respect of Snap Lake, agreement was reached with the Yellowknives Dene First Nation in November 2005, the Tlicho Government in March 2006 and the North Slave Metis Alliance in August 2006. The last of the four impact agreements, with the Lutsel KÔÇÖe and Kache Dene First Nation members was agreed in April 2007. The Snap Lake ore body was purchased by De Beers from Winspear Diamonds in 2000, and the permits to build and operate the mine were obtained in May 2004. Between January 2005 and June of this year, $1.1 billion was spent on the mine. Seventy per cent of that ($775 million) was spent with Northern companies, and two thirds of that spending was with Aboriginal companies or joint ventures involving them. In any construction project, delivery of equipment and materials is a challenge to logistical expertise. The construction of a mine in the Northwest Territories is infinitely more complex than usual, however. Permanent roads are prohibitively expensive to build, so the only vehicular access is the ice road, which is open, on average, for around eight weeks each winter. Anything the mine requires that has to be delivered by road, including fuel, buildings and equipment too bulky to be transported by air, has to come up the ice road in an eight week window in the coldest part of the winter. ÔÇ£You have to have your planning done well ahead of time,ÔÇØ said Gowans, ÔÇ£and your engineering, because if itÔÇÖs custom designed you have to have your steel already designed and fabricated, inspected and ready for shipment. If youÔÇÖre doing it yourself you have to make sure your contractors have their equipment and everything up there.ÔÇØSnap Lake is an underground mine, and underground mining is expensive, so equipment has to be chosen that will do the job most efficiently. ÔÇ£The ore is in a thin ribbon between 1.9 meters and 3.4 meters thick,ÔÇØ said Gowans. ÔÇ£The best way to mine it is to use low profile equipment.ÔÇØ The equipment that De Beers has selected to use underground is trackless and low to the ground, making it easier to access areas of low overhead clearance and small spaces. The primary entrance to the mine is therefore a mere five meters wide by 4.5 meters high. Everything involved in the preparation of a new diamond mine seems to involve a high level of complexity. But once youÔÇÖve got the ore body (kimberlite) out of the ground, the process seems much more straightforward. Diamonds are not chemically attached to the host rock, so recovery is more like harvesting than processing. Having said that, however, we must remember that even where diamonds are found in relative abundance, they are like needles in a haystack. Hundreds of tons of material a day must be processed to reveal a handful of precious stones. ┬á