The 54M carat gem: De Beers’ new diamond mine is a rare thing that could be the gem giant’s best friend – by Jesse Snyder (Financial Post – September 24, 2016)

GAHCHO KUÉ, N.W.T. — Seen from inside an approaching aircraft, the Gahcho Kué diamond mine seems to materialize out of nowhere, a speck of industrial development amid an endless stretch of low vegetation and tiny lakes imprinted on the northern Canadian rock face. Here, there are no natural points of reference. The view looking out from one side of the mine is nearly indistinguishable from any other.

But beneath the surface, the location is distinct from its surroundings. Under the cap rock at Gahcho Kué are three vertical tubes of mineral — known in the industry as pipes — rich with diamonds. The mine is expected to produce 54 million carats of diamonds during its 12-year lifespan, making it the world’s largest new diamond mine to be constructed in 13 years.

The joint-venture operation, located about 280 kilometres northeast of Yellowknife, is 51-per-cent owned by De Beers Group of Companies, a privately owned diamond mining and retail company, and its massive London-based parent, Anglo American PLC. Toronto-based Mountain Province Diamonds Inc. owns the other 49-per-cent stake.

But the new mine is more than just a rare development in the diamond industry. De Beers touts Gahcho Kué as a much-needed economic boost for the Northwest Territories, saying it will add $5.7 billion to the local economy during its lifespan. It also represents new hope for the company’s Canadian operations, a stable new supply that comes at a time of heightened uncertainty in the diamond industry.

Gahcho Kué will offset declining production at the company’s other two Canadian diamond operations, which have met setbacks amid falling diamond prices and local opposition.

In December 2015, De Beers began shuttering operations at its Snap Lake mine in the Northwest Territories, and put the project up for sale this summer after the mine’s economics became unfeasible. A planned expansion at its Victor mine, located in northern Ontario, has been delayed because of resistance from the local Attawapiskat First Nation.

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