October 22, 2013 / 7:18 PM / in 4 years

Canada approves construction of new diamond mine

(Reuters) - The Canadian government on Tuesday approved the development of the Gahcho Kue diamond mine, the project’s owners De Beers Canada and Mountain Province Diamonds said, setting in motion the building of the country’s sixth diamond mine.

Gahcho Kue, 280 km (175 miles) northwest of Yellowknife in Canada’s remote Northwest Territories, is expected to take two years to build. It is forecast to produce an average of 4.5 million carats a year over 11 years of mine life.

The approval by Canada’s minister of aboriginal affairs and northern development means Gahcho Kue’s land use permit and water license can now be processed. The mine will employ some 700 people during construction.

In August, several aboriginal groups in the Northwest Territories urged the federal government not to approve the mine plan in its proposed form, arguing that it would damage water quality, caribou populations and the future of a lake, the Canadian Broadcasting Corp reported.

De Beers, a unit of Anglo American Plc, already has two producing diamond mines in Canada, Snap Lake in the Northwest Territories and Victor in northern Ontario.

Reporting by Nicole Mordant in Vancouver; Editing by Bob Burgdorfer

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