Snap Lake diamond mine for sale

July 25, 2016

The Snap Lake diamond mine in Canada has been put up for sale by DeBeers.

Operations at the unprofitable mine which began production in 2008 were suspended near the end of 2015. The company is now looking for a buyer for the mine in Canada’s Northwest Territories.

Snap Lake has not made money since it began production. It produced 1.2 million carats last year and was initially planned to operate until 2028.

Reuters reported that in June, De Beers Canada received approval to flood the mine tunnels, reducing maintenance costs, under a revised suspension plan. The flooding has not yet happened but planning work continues. If no buyer is found, the flooding plan could proceed.

“Before we get into that actual flooding of the mine ... we thought it would be prudent, certainly, to see if there was an interest,” Ormsby said.
De Beers Canada spent C$2.2 billion ($1.67 billion) on mine construction and operation up to year-end 2014.

De Beers, 85 percent owned by Anglo American and 15 percent by the government of Botswana, has been hurt by waning demand and slumping prices in the diamond industry.

Snap Lake was De Beers' first mine built outside Africa and is 220 km (137 miles) northeast of Yellowknife, the capital of the Northwest Territories.

Accessible only by air and an ice road that operates for two months of the year, the mine was plagued with ground water problems from extracting diamonds below Snap Lake. It employed 595 staff and 200 contractors before its suspension.

Other diamond miners operating in Canada's Arctic include Rio Tinto Ltd. and Dominion Diamond Corp.

De Beers Canada also operates the Victor diamond mine in Ontario, which is set to close in 2018 unless an expansion proceeds. It is also building the Gahcho Kue diamond mine in the Northwest Territories.



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