Alrosa Analysing Future of Mir Mine: Earliest Reopening Date 2030

Mining and Exploration
18/03/2019 15:25

Russia's Alrosa has been exploring its options for the currently suspended Mir underground mine development, and has announced that it has worked out a decision-making concept regarding whether to restore Mir as an operating mine or move toward full closure of the mine. Should the miner decide the plan to reopen the Mir mine is economically viable and can be done safely, the earliest it might reopen would be 2030, and it could take even longer.

The miner will first undertake deep level exploration down to -1,300 metres to confirm the mine's reserves and assess whether reopening the mine would be economically viable. Budgeted at around RUB 2 billion ($31 million), this work is already included in the Group's RUB 28.7 billion capex program for 2019. This work should be completed by early 2022, after which - depending on the results of the exploration works - pilot holes will be drilled to start preparation of deposit opening design documents within one to two years. This work is to be completed before 2024. Simultaneously, the Company will carry out conceptual design activities to ensure water disposal at the mine and choose the best mining technology as well as ventilation and gas safety options.

If it is decided that the restoration of the Mir underground mine is feasible, the construction is estimated to take 6 to 8 years after 2024. "In summary," the miner says in a statement, "Mir mine restoration can start no earlier than 2024 and only if the studies yield positive results, and if it is confirmed that construction and mining can be done with the highest level of occupational safety." Alrosa said its decision about further development of this mine will be based solely on safety considerations and economic viability. Mining activity at Mir was suspended in August 2017 after a flood in the mine took the lives of eight Alrosa employees.

The Mir Mine forms part of Mirny, one of Alrosa's four mining and processing divisions. The Mir Mine was operated as an open cast mine from 1957 to 2001, when it produced $17 billion worth of rough diamonds, and came to be a symbol of the Russian diamond mining industry. The conversion of Mir into an underground mine cost Alrosa 22 billion rubles (at today's exchage rates around $350 million). According to experts, the costs were be returned in three and a half years. The estimated mine life is 50 years. Its design capacity is one million tons of ore annually. The Mir Underground Mine was officially commissioned in Mirny, Yakutia, in 2009.