De Beers Group diamond mine to suspend operations at Snake Laker N.W.T.

The huge global diamond producers De Beers Group is shutting down its Snap Lake diamond mine in the Northwest Territories of Canada. Over 400 jobs will be lost as a result.

De Beers was founded back in the 19th century by Cecil Rhodes in southern Africa, but now operates in some 28 countries. It still operates in Botswana, Namibia and South Africa but also has mines in Canada. Its headquarters now are in Luxemburg and it still controls about 35 percent of global rough diamond production. However, it has long lost any monopoly power in the industry and the ability to set prices as it had earlier. In the 1980s it still controlled 90 percent of rough diamond production.

Kim Truter, the CEO of De Beers Canada, said the company would be evaluating market conditions over the next year to see if the underground mine is financially viable. He said: "The men and women at Snap Lake have put enormous effort into this challenging ore body over many years, but even the gains made this year are not enough to overcome the market conditions and put us in a profitable position.

N.W.T. Premier Bob McLeod said about 300 of those who work in the mine live in the territories while the others fly in from elsewhere in Canada. The mine is about 220 kilometres northeast of Yellowknife.Closing the mine will require 190 workers, and the continuing care and maintenance will involve about 70 workers. De Beers has spent about $1.5 billion with N.W.T. companies over the years. $865 million was spent on aboriginal firms as well as joint ventures with them. Analysts warned the closing of the mine would have devastating effects on the local N.W,T. economy.

Some 100 workers will be able to work at De Beers' Gahcho Kue project near Kennady Lake in the territories. The mine is slated to begin production next year. De Beers claims it is attempting to give northerners and aboriginal workers first preference in hiring for the project.

The Snap Lake project has had difficulties from the beginning, with underground production creating higher costs while diamond prices have been declining. The mine also encountered a costly water problem. The closure was not unexpected and Truter said he was "quite humbled" by how the workers accepted the news of the closure. Employees will receive full salary and benefits for 16 weeks and compensation in accordance with local legislation. However, some claimed the layoffs were devastating so close to Christmas.

Grand Chief, Edward Erasmus, of the Tlicho said:"This is a very sad day for our N.W.T. people and economy, not only for the Tlicho but for everyone. Sometimes tough business decisions have to be made, and we understand that De Beers had to make that decision today.We will be working closely with our businesses and with workers to lessen the impact on our people. We know that De Beers is working hard to make sure there is counselling available for workers."The Snap Lake mine began operations in 2008. Three diamond mines in the N.W.T. including Snap Lake, produce 40 percent of the N.W.T. gross domestic product(GDP)

There was a general election in the N.W.T. on November 23 but a new premier and cabinet will not be chosen until later in the month.

NWT Premier Bob McLeod proposes oil pipeline to Beaufort Sea from Alberta

Bob McLeod who is premier of Canada's Northwest Territories argues that the province of Alberta should consider promoting a pipeline north through the territories to the Beaufort Sea. The pipeline would move oil north from the Alberta Tar Sands and then it could be shipped through the Beaufort Sea and Bering Strait to Asian markets.

There is already a proposed pipeliine through British Columbia to a Pacific port in British Columbia that would then ship oil by tanker to Asian markets. However that pipeline called the Northern Gateway faces strong opposition from environmentalists and aboriginal people who occupy land along the proposed route.'The premier of British Columbia, Christy Clark, has also demanded that certain conditions be met before her government would approve the project.

McCleod hoped that the Northwest Territories would benefit from a proposed McKenzie Valley pipeline that would carry natural gas from the Beaufort Sea into Alberta where it would join with an existing natural gas line. However that project has been beset by difficulties. Several investors recently pulled out of the project and it is now on hold. The proposed oil pipeline would compensate for the failure of this project to go ahead.

There have been no direct talks between the government of Alberta and the Northwest Territories on a possible oil pipeline to the north. However Cal Dallas the minister of internatioanl and governmental affairs for Alberta told the CBC that he would be more than pleased to talk to Premier McCleod to explore potential projects. Dallas thought that McCleod's remarks could very well encourage the private sector to study the viabillity of other pipeline projects of the sort McCleod suggests.

The Arctic environment might be devastated by any oil spills especially any spill in the icy waters of the Beaufort Sea. Environmentalists and aboriginal groups would probably object to a northern route just as vehemently as they do to the Northern Gateway Project. For more see this article.