Permitting slows for DeBeers project

DeBeers Canada Inc. is exploring the Gahcho Kué project in the Northwest Territories this summer, hoping to confirm its potential to become the company's second major diamond mine in the Canadian Arctic.

Of the four major mining projects De Beers is developing, two are in Canada, which has emerged in the past 15 years as one of the world's most prospective diamond mining regions.

The two advanced Canadian developments are the Snap Lake Diamond Project in the Northwest Territories and the Victor Diamond Mine Project, in remote northern Ontario.

Snap Lake, expected to be Canada's first underground diamond mine, is nearing completion of construction, with startup of production due by Sept. 30.

At the Victor project, construction is also on target for an accelerated production startup of an open pit diamond mine by mid-2008.

But at Gahcho Kué, about 48 miles southeast of the Snap Lake project and 180 miles northeast of Yellowknife, DeBeers and joint venture partners Mountain Province Diamonds Inc. (44 percent) and Camphor Ventures (4.9 percent) are still in the pre-development and permitting stages of the project.

At least eight diamondiferous kimberlites, along with sills and dykes, have been discovered at the Gahcho Kué property, which formerly was known as Kennady Lake.

Conceptual studies completed in 2000 and 2003 indicated the potential to mine 20 million of the estimated 31 million metric tons of delineated resource of the 5034, Hearne and Tuzo pipes, at a yearly rate of 2 million metric tons.

Permitting, exploration under way

The DeBeers-led JV has mounted a drilling program this summer aimed at extracting 100 carats of diamonds from the North Lobe of the 5034 pipe for further evaluation.

The JV is also seeking regulatory permission to develop and operate a diamond mine with an estimated life span of 15 years with an estimated initial investment of more than $900 million.

The mine project would employ up to 700 construction workers and provide long-term work for 400 individuals, or nearly 1 percent of the Northwest Territories job market. In comparison to the Mackenzie Gas Project, Gahcho Kué would provide more person years of employment, according to the Mackenzie Valley Environmental Impact Review Board.

The Gahcho Kué work plan calls for draining Kennady Lake and excavating the Tuzo, Hearne and 5034 kimberlite pipes, and as the pipes are mined, waste rock and processed kimberlite slurry will be used to backfill the pipes already mined. The backfilling is designed to reduce the amount of waste rock left in on-land storage facilities at the end of the mine life and to assist in the refilling of Kennady Lake during the reclamation process.

An on-site processing plant will crush, size and refine kimberlite ore to extract rough diamonds. The diamonds would be transported to a diamond sorting and valuation facility in Yellowknife where they will be added to product from Snap Lake for sale to clients.

The processing plant will produce both coarse and fine processed kimberlite. Ferrosilicon powder and flocculants will be used as additives in the ore processing; both substances are environmentally benign. Processed rock not used in backfilling will be stored in one of two on-land processed kimberlite containment facilities. Waste rock will be used to seal in the processed kimberlite. At the end of mine life, a waste rock pile and the PKC storage facilities will be the most noticeable remainders of mining operations, according to the work plan.

Other key facilities proposed for Gahcho Kué include a water treatment plant, water management pond and sewage treatment plant. The sewage treatment plant will dewater sewage sludge and then treat the effluent and incinerate the solid material. This treated effluent will be discharged to Kennady Lake during the construction phase and directed to the processing plant during normal operations.

The project would make use of the Tibbitt-Contwoyto winter road, currently operated by the joint venture partners who operate the nearby Ekati, Diavik and Lupin mines. At Kilometer 271 of this road, a 72-mile winter access road extending to Gahcho Kué will be built according to requirements of the operating license of the Tibbitt-Contwoyto road. The project's work plan also calls for construction of a 45-meter-wide by 1,620-meter-long airstrip at the mine site.

A power plant, warehouse/workshop complex, administration complex and camp/accommodations also would be built at the Gahcho Kué site.

Review Board orders more environmental study

After completing an environmental assessment of the Gahcho Kué project, the review board ordered the project to undergo a complete environmental impact review.

The decision resulted in an unsuccessful court challenge from De Beers and its partners. They argued before the Supreme Court of the Northwest Territories that the review board did not follow Canadian law when it concluded that the proposed mine project needed additional study because it "likely is a cause for significant public concern" in the region.

The review board cited several reasons for its conclusion, including the huge impact a project the size of the proposed Gahcho Kué mine could have on the surrounding area's wildlife, especially the declining Bathurst caribou herd, which has shrunk more than 60 percent from 472,000 animals in 1986 to 186,000 animals in 2003 and on its indigenous residents. Communities of the Tlicho and Akaitcho First Nations regions are located near the proposed mine site.

"Adding a diamond mine and the associated increase in traffic on the ice road, to the already existing industrial development, including three diamond mines on the NWT side and one on the Nunavut side of the Slave geological province, is likely to further affect caribou. Given the observed decline and the importance of caribou to economy, culture and ecosystem, any appreciable impact on caribou may be considered significant. … Impacts on caribou are likely to be accompanied by impacts on the cultural, social, and economic well-being of residents of the Mackenzie Valley," the review board wrote.

Work plan calls on new technology

The review board also noted that new mine technology would be used to develop the Gahcho Kué mine.

"Similarly, draining 80 percent of Kennady Lake and exposing the lake bottom for a long period of time is likely to affect the benthic environment of the lake. During both community and technical issues scoping the ecosystem's ability to recover has been questioned by residents as well as DFO representatives. Moreover, the release of large quantities of water into a drainage system characterized by little relief, and therefore slow-flowing streams, is likely to result in environmental change. This rapid release would later be followed by a flow reduction of 75 percent," the board said.

"There are numerous other issues, e.g. the proposed development's potential impacts on tourism or on family cohesion, for which the public record does not contain sufficient information for the review board to determine whether or not the development is likely to cause a significant adverse impact on the particular component of the environment," the board added.

The high court in the Northwest Territories upheld the review board's decision April 2.

On June 1, the review board released for public review and comments the JV's draft work plan for the Gahcho Kué project and expressed a hope that the DeBeers JV would complete an environmental impact statement for the project by October.

In a letter to the review board July 16, Ed Huebert, environmental affairs manager for De Beers Northwest Territories projects, suggested the EIS likely will be completed no earlier than January 2008.