NWT diamond project gets nod from panel

Full approval for the NWT Diamonds project in the Lac de Gras area of the Northwest Territories is at hand for BHP Minerals and Dia Met Minerals (DMM-T).

The Environmental Assessment Review Panel determined that the environmental effects of the project are largely “predictable and mitigable.” As a result, the panel is recommending the project be approved.

The 4-person panel was appointed by the federal government in late 1994 with a mandate to complete an independent review of BHP’s environmental impact study on the project. The review included public information and comment meetings in Yellowknife, as well as surrounding native communities.

The project still requires federal approval; the panel’s report has been forwarded to the minister of the environment as well as the Department of Indian Affairs and Northern Development (DIAND).

DIAND will make a recommendation to Cabinet on the proposed mine, and BHP hopes to get approval some time this summer, which would allow the company to secure water permits and land lease before winter sets in.

If permits are issued before this winter, BHP may have time to start earth-work and foundation construction in the fall.

Karen Azinger, a spokesman for BHP, points out that timely approval of the diamond mine is necessary to ensure the components are ready for transport to the property over the winter road in early 1997.

Assuming all goes well, BHP estimates that the mine will be in production sometime in 1998.

Azinger points out that BHP has already received some 2,700 applications for employment from men and women interested in working at the diamond mine.

Roughly 56% of those applications are from northerners, half of whom are aboriginal.

BHP has not even started advertising for workers at the mine and the company does not expect to be hiring until roughly 18 months after the start of construction. All the construction hiring will be done by the respective construction contractors.

Over its projected 25-year life, the NWT Diamonds project will process 133 million tonnes of ore from five diamond-bearing kimberlite pipes using a combination of open-pit and underground mining methods.

The capital cost of the mine is estimated at US$500 million, and the project is expected to generate $400-500 million in revenue per year over most of its life.

No official estimates are available, but various mining analysts have projected annual cash flow from the mine at US$230-270 million per year.

BHP holds a 51% interest in the property, while Dia Met Minerals holds a 29% interest with the balance of 20% split between Stewart Blusson and Charles Fipke.

Under the terms of the joint-venture agreement, BHP is required to fund the first US$500 million in development costs, and it is entitled to 90% of the mine’s cash flow until it recoups its investment with interest.