De Beers gets approval to flood suspended Arctic diamond mine

Wed Jun 29, 2016 11:34am EDT
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By Susan Taylor

TORONTO, June 29 (Reuters) - De Beers Canada can flood the tunnels of its underground Snap Lake diamond mine in the Northwest Territories under a revised suspension plan approved by the region's land and water board.

The company is weighing whether to sell, close, reopen, or continue suspension at the money-losing Arctic mine, which was shuttered last December due to poor market conditions. Waning Chinese demand and an industry credit crunch have been hurting the sector.

Flooding the mine tunnels will cut costs to pump out water and reduce environmental risk, De Beers Canada said in its extended care and maintenance plan.

The temporary closure, approved on an interim basis pending required updates, could run for three or more years, depending on market conditions.

"The decision is helpful because it really helps us preserve ... a pretty significant resource in the ground," said De Beers Canada spokesman Tom Ormsby.

Snap Lake, which has made no money since production began in 2008, produced 1.2 million carats in 2015 and was due to run until 2028.

The operation, which had 595 employees and 200 contractors before the suspension, currently has some 75 staff for ongoing care and maintenance work.

In its April application, De Beers Canada said it may investigate a remote water monitoring system, which would need no on-site staff. That would require separate approval, the board said in a decision posted on Wednesday.   Continued...