by Greg Klein | May 19, 2016
Canada’s largest diamond mine reached a production milestone this week as Diavik passed the 100-million-carat mark. In operation since 2003, the project’s now a 60/40 joint venture of Rio Tinto NYSE:RIO and Dominion Diamond TSX:DDC, with Rio acting as operator. The company lauded “the teams who have helped make this happen safely and responsibly in some of the harshest operating conditions in the world.” The mine sits about 220 kilometres south of the Arctic Circle in the Northwest Territories’ Lac de Gras region.
Rio expects to bring a fourth pipe called A-21 online in H2 2018, spending US$350 million over a four-year period that began in 2014. A-21 would add a proven reserve of 10 million carats, helping extend Diavik’s lifespan to 2023.
The mine employs approximately 1,100 people, half of them living in the north and one-quarter aboriginal. Since 2003, operators have spent C$6.8 billion on goods and services, over 70% with local firms, many of them native-owned.
“Strong and respectful partnerships are at the heart of the way we work at Diavik and I would like to thank all of our investors, our community, business and government partners, and our workforce for their support over the past 13 years,” said Diavik president/COO Marc Cameron.
After De Beers suspended Snap Lake operations last December, the NWT was reduced to just two mines, Diavik and Dominion’s majority-held Ekati. Those two, however, produce enough diamonds to place Canada third in world production by value. Lac de Gras gains “the world’s largest new diamond mine” in H2 this year as Gahcho Kué begins production on a probable reserve totalling 55.5 million carats. A 51%/49% JV of De Beers and Mountain Province Diamonds TSX:MPV, the mine was 94% complete as of last week.
Creating nearly 40% of the territory’s GDP in 2014, diamond mining provides the NWT economy’s largest private sector contribution.
The Diavik discovery followed Chuck Fipke’s 1991 Ekati find, which set off the country’s biggest staking stampede since the Klondike. Matthew Hart’s Diamond: The History of a Cold-Blooded Love Affair recounts Diavik’s dramatic 1994 discovery by Eira Thomas, then a 24-year-old project manager for Dominion-predecessor Aber Resources.
Thomas now serves as president/CEO of Kaminak Gold TSXV:KAM, which last week announced a takeover bid by Goldcorp TSX:G valued at C$520 million.