De Beers Diamonds

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The largest diamond company in the world, De Beers, broke new ground in the Northwest Territories, Canada, with the official opening of its Snap Lake Mine in July 2008. Snap Lake is the first of its two new Canadian mines recently constructed and opened. The company opened the Victor Mine in northern Ontario the following day. With an investment of close to $2 billion to construct the two mines, De Beers has completed the transition of its Canadian subsidiary from an exploration company to an exploration and mining operation. Built on the shores of Snap Lake, 220 kilometres north of Yellowknife, it is the first completely underground diamond mine in the country. Snap Lake has about a 20 year mine life based on 1.5 million carats a year, at full production. “As the mine is developed, we are looking at quantifying other resources. There is potential for the mine to go significantly beyond the 20 years life,” indicated Cathie Bolstad, Director of External and Corporate Affairs for De Beers, Canada. Snap Lake sits well in terms of the length of life left for the mine, and among DeBeers’ other mines, Snap Lake is well positioned well with respect to longevity. To access such a remote site, construction started with the winter access road in 2005.

The following two years saw the building of an automated process plant capable of handling 3,150 tonnes of ore per day. The plant also includes water and sewer treatment plants, an airstrip, and finally a utilities plant to power the site. “Because Snap Lake is in such a remote and isolated place in the arctic, other than a short period when we have access to a winter ice road, we have to fly everything in,” says Bolstad. DeBeers spent close to a billion dollars on constructing the mine between 2005 and 2007. “You can imagine the importance of the winter road for equipment, supplies and transport of non perishable food,” she continues.

The type of kimberlite deposit dictates whether the mining method will be open pit (surface) mining or underground. “The Snap Lake ore body is a two-and-a-half metre thick dyke that dips at about a 15 degree angle from the northwest shore coming up from under the lake to the surface of the earth. The most suitable method to access diamonds is an underground mining method,” says Bolstad.

Because of the deposit’s unique formation and its proximity to the lake, the project is a technically challenging deposit to extract in comparison to open pit diamond mines nearby.

“It is not the kind of underground mine where you go down in a shaft. Rather, there is a portal to the underground and we use underground roads and tunnels,” says Bolstad. Accordingly, there are significant safety protocols around the operation of the equipment and for work both on surface and in the underground. The company has implemented a number of safe-work procedures that are developed specifically for this work environment, and for the operation of the equipment at the mine. The company’s Emergency Response Team is trained for both surface and underground emergency response.

Safety training and procedures are a necessary and ongoing process in mining. “Safety is always a top priority,” says Bolstad. “Our goal as a company is ‘triple zero every day’,” she continues. “We aim to make sure employees are not harmed, and there are no medical aids and no injuries, everyday.”

De Beers has a second project in the advanced exploration phase called the Gahcho Kué project. It is a joint venture with Mountain Province Diamond ( with DeBeers owning 51 per cent ). The project has recently commenced a $10- million feasibility study which will take about a year to complete. The project is currently in the analytical phase of the permitting process in the   Northwest Territories. The proposed Gahcho Kué Project is an open pit mine and will be De Beers’ third Canadian diamond mine.

Having the world leader in diamond mining establish a presence in the Northwest Territories brings in international experts and significant experience. “We have mined all kinds of diamonds deposits and with over 120 years experience in mining and marketing diamonds, the experience from the group in Africa coupled with our Canadian mining experts means we have a very strong team,” says Bolstad. She notes Snap Lake is attracting some of the brightest in the industry, those who are interested in pioneering a very challenging diamond deposit Canadian underground mine.

Community relations
The addition of Snap Lake to the DeBeers family has brought tremendous business and employment opportunities to the northern region. In September, Snap Lake surpassed close to a billion dollars spent with northern businesses since commencing construction, of which $625 million was spent with northern aboriginal businesses from the north. In 2010, northern business expenditure will pass the billion dollar mark. Says  Bolstad of these companies, “when our industry does well, all of these industries that support our industry do well, too.”

Not only does De Beers generate money for the surrounding communities, it involves them in the project, and is conscientious of leaving a positive impact on the communities which are situated close to where they mine. First Nations communities want to see resource development undertaken responsibility. Says Bolstad, “For Snap Lake Mine specifically, we have negotiated four impact benefit agreements with First Nations communities. These agreements are with the Yellowknives Dene First Nation, the Tlicho Governement, the Lutsels K’e Dene First Nation and the North Slave Métis Alliance.” The agreements put in place a  framework for De Beers and the communities to work together to maximize participation in the project and that they work together to minimize any negative implications the project could have on their communities or populations. Those agreements include business opportunities in terms of contracts, training and apprenticeship positions at the mine, educational scholarships, as well as financial commitments from the company for them. Having a long-life diamond deposit like Snap Lake in the NWT and ownership of this deposit by the world’s leader in diamond mining is a good thing for the Northwest Territories. Although the world’s economic slowdown has made it a tough year for the diamond industry, and the Northwest Territories has not been immune from the impacts, the long term view is a good news story. The long term demand for diamonds is increasing, and the number of mineable diamond deposits is decreasing. With the current economy in the NWT enjoying more than one half its GDP from diamonds, and De Beers being the only company with a new diamond deposit on the horizon and already in the permitting process, De Beers and the Northwest Territories are well positioned to provide the Canadian north with additional benefits and new opportunities in diamond mining now and in the future.

The origins of diamonds
Diamonds are formed from carbon deep beneath the earth, and are carried towards the surface together with a range of other unique minerals called indicator minerals, during volcanic eruptions. Once the volcanic activity subsides and cooling takes place, the diamonds remain encased in the solidified rock mass known as kimberlite. Over the years, the weathering effects of sun, rain, wind, snow and ice erode the kimberlite releasing the indicator minerals and, in some cases, diamonds.

In Canada, these diamond-bearing kimberlites often lie beneath water in remote areas where the idea of anyone even beginning to find diamonds is extraordinary. And the search for diamonds is further complicated by the fact that over centuries ice movement has spread many of the indicator minerals — sand-sized particles that can suggest the presence of diamond-bearing rock — out over areas far away from the kimberlite pipes. For more information on the formation of diamonds, visit www.debeersgroup.com/diamond.

Canada:
A diamond producing nation For many years, the idea of finding diamonds in Canada seemed little more than a prospector’s dream. But that dream has become a reality following the recent discovery of several world-class diamond-bearing deposits in the Canadian north. Today, Canada has two established diamond mines and several projects scheduled to begin production within the next few years. In 2004 Canada was ranked the third largest producer of diamonds, by value, in the world behind Botswana and Russia. In 2004, 40 percent of world diamond exploration expenditure was dedicated to the search for diamonds in Canada, with 33 per cent having been spent in Africa.

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