De Beers Suspends Victor Diamond Mine Expansion Indefinitely

Mining and Exploration
08/02/2017 12:06

De Beers is shelving immediate plans to study an expansion project, called Tango, at its Victor diamond mine in northern Ontario after failing to get support from a neighboring aboriginal community, writes Reuters. De Beers Canada general manager James Kirby told Reuters late last week that this is a "disappointing" setback for the diamond miner, but resistance to the project from the First Nation of Attawapiskat, living 90 kilometers (56 miles) east of the mine, has been an ongoing issue for years. The Victor mine in the James Bay lowlands produces some 600,000 carats of diamonds annually and is scheduled to stop production in late 2018 and close in early 2019. The nearby Tango deposit could add five or six years of production, and De Beers does not legally need permission to explore, but the mining giant has recently taken a diplomatic approach to community relations: in September last year, CBC News confirmed, "De Beers Canada says it won't even look at expanding its diamond mining operations near Attawapiskat without the blessing of the community." This blessing does not appear forthcoming.

Back in February 2016 we wrote, "De Beers has ceased exploration of the Tango extension near the Victor diamond mine due to local pushback. The Victor mine is located in the James Bay lowlands of northern Ontario, and is the province's only diamond mine. DeBeers is hoping to extend mining operations into a nearby deposit called Tango, but first needs to determine it's feasibility. The company said the exploration is required as the Victor mine enters its final years. Tom Ormsby, a spokesman for De Beers Canada, said the company has halted its plan to take a bulk sample of the new mining grounds." Reuters retraces the opposition: "The community of about 2,000, which has grappled with such challenges as inadequate housing and flooding, last April declared a state of emergency after a wave of suicide attempts. It has had a rocky relationship with the company, reflecting concerns over economic and environmental issues, blockading the mine access road in 2013. Talks resumed only in recent weeks and did not make progress on Tango, said Kirby, who manages Victor."

De Beers Canada has already suspended its unprofitable Snap Lake mine in late 2015 and opened Gahcho Kué together with partner Mountain Province last year. Without Victor, De Beers Canada has just one producing diamond mine in the country. "We really want to be expanding and getting the diamond mining industry going, not closing and retreating to just one asset," said Kirby. "It's highly disappointing." Kirby told Reuters that Tango is not permanently canceled and could revive with community support, but further delays may create a production gap, boosting costs and impacting profitability. Tom Ornsby, head of corporate affairs, added that there is still potential in the 6-7 million tons of lower-grade ore stockpiled on the surface, which could generate economic opportunities for the next two to three years at the Victor site, while the Tango deposit could still be pursued in the future, if DeBeers gets the community's approval. He said De Beers continues to talk to the community and they haven't said 'no'. Offers to buy the site could also be considered, Kirby said, but the company currently plans to dismantle and remove operations during shut-down.