De Beers Expects Canadian Mine by 2004

De Beers hopes to open its first Canadian mine by 2004. After acquiring the Snap Lake concession in a hostile bid last December, De Beers plans to turn it into a mine within four years. It will be the first underground diamond mine in the Northwest Territories as well as De Beers’ first owned and operated mine outside Southern Africa, De Beers Canada president and CEO Richard Molyneux told JCK.

The proposed mine will produce 1.5 million carats a year—less than the other two mines in the area, Ekati and the upcoming Diavik, but significant nevertheless.

“Canada is certainly well on its way to becoming a major producer,” Molyneux says, estimating that the country will account for 15% of world production by 2005.

One question remains: Will De Beers be able to market all the diamonds itself, or will there be problems with Canadian antitrust laws, as there were when De Beers was negotiating to sell Ekati’s production? “At this stage, I certainly anticipate that most of the production will go through the Diamond Trading Company,” Molyneux says. “We are four years away from that. We quite honestly haven’t given any thought to that aspect.”

Construction of the mine is contingent upon government regulatory approval. Molyneux says there aren’t as many environmental issues associated with this mine as there were with Ekati or Diavik. He hopes to have the regulatory process wrapped up by the third quarter of next year.

Whatever happens with this mine, there may be more developments from De Beers Canada: Molyneux says De Beers’ Kennedy Lake project is “very promising.”