Mired in several recent controversies including the creation of a rough diamond bubble and adverse impact on the trade after the bubble bust, De Beers made another blow by planning to close down its Snap Lake diamond mine in Canada’s Northwest Territories (N.W.T).
The company sighted two primary reasons for closure of the mine. First being adverse market conditions and softening demand and second, environmental concerns and water license issues at the mine. Snap Lake mine is Canada’s fully underground diamond mine, around 220 kilometers northeast of Yellowknife and produced 1.2 million carats of diamonds last year. Opened in July 2008, Snap Lake mine had a life of around 40 years and was planned to remain in production at least till 2028. Closure of the mine means a significant rough supply being taken off the pipeline overnight.
The mine was apparently facing huge flow of groundwater containing high concentration of dissolved solids including minerals like chloride, which it could not release into Snap Lake, even after treatment, without overstepping the prescribed discharge limits. Amended water license was the key for the future of the mine.
Last year itself, environmental issues at De Beers’ Snap Lake Diamond mine were raised where non-compliance of license due to excessive discharge of chloride content into lake was observed and protested by Mackenzie Valley Land and Water Board. Sought-after changes in the water license were also opposed by N.W.T’s aboriginal groups
However, out of around 700 workers of Snap Lake mine, around 60% or 434 job cuts were made and 41 people were reassigned to De Beers’ Gahcho Kue mine, which has an expected life of 11 years. According to an estimation, Snap Lake’s 17% workforce was aboriginal. Closure of Snap Lake mine not only has an adverse impact on N.W.T.’s GDP but also to the entire diamond pipeline in general.
Last fortnight, De Beers also sold its oldest and last remaining producing asset in South Africa’s Kimberley – Kimberley mines to Petra Diamonds and Ekapa mining for around USD 7.2 million.
De Beers mentioned that the mine was closed for ‘care and maintenance’. The company had earlier mentioned that out of the many outcomes, one is shutting down the mine. The prophecy came true – unfortunate for De Beers but a win for the environment.