De Beers suspends operations at Canada's Snap Lake diamond mine

Fri Dec 4, 2015 12:02pm EST
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TORONTO Dec 4 (Reuters) - De Beers Canada said on Friday that operations have been suspended at its unprofitable Snap Lake diamond mine in the Northwest Territories, due to poor market conditions, and it will evaluate the mine's potential over the next year.

De Beers, which is 85 percent owned by Anglo American Plc and 15 percent owned by the government of Botswana, said that work to put the underground mine on care and maintenance has begun and is expected to last from one to nine months.

The mine, 220 kilometers (137 miles) northeast of the territorial capital of Yellowknife, has not made any money since it began production in 2008 and was planned to operate until 2028.

De Beers said 434 employees have been terminated and that it will employ 120 employees for the suspension work, while ongoing care and maintenance operations will require about 70 staff.

The company has transferred 41 employees to its Gahcho Kue mine, now being built in the Northwest Territories with Mountain Province Diamonds Inc, a 49-percent partner in the project.

Gahcho Kue is expected to start production in late 2016 and operate for 11 years. (Reporting by Susan Taylor, editing by G Crosse)