Second Canadian Mine Clears Last Regulatory Hurdle

Rob Bates -- JCK Online, 2/1/2001 2:00:00 AM

Diavik, the planned second mine in Canada's Northwest Territories, is almost certain to begin production in the first half of 2003.

The mine just received final approval from local water authorities to begin construction, meaning all government regulatory hurdles have been cleared. Tom Hoefer, the mine's manager of public affairs, says the mine now just has to sell its plans to shareholders. "They've already invested a lot of money in this project, so we're hopeful that they'll say yes," Hoefer says. "We are very pleased. It's the culmination of five and half years' work."

The mine is expected to produce nearly six million carats a year, more than the three to four million a year produced by the first mine in the region, Ekati. That breaks down into 30% gem, 30% near-gem, and 30% industrial, Hoefer says. The average diamond value is around $56 a carat.

Aber Resources and British mining giant RTZ own the mine. Aber Resources has made a deal to sell the best diamonds from its share to famed retailer Tiffany, but Hoefer says that no other decisions have been made regarding marketing arrangements.

The mine will cost nearly $1.3 billion to construct and will employ approximately 400 people. Its expected life span is 20 years.