De Beers considering closing Canada's Snap Lake diamond mine

By Susan Taylor
TORONTO, Dec 3 (Reuters) - De Beers Canada said on Thursday
that it may consider closing its Snap Lake diamond mine in the
Northwest Territories, alongside other options, as it grapples
with falling prices and costly operations at the unprofitable
Arctic mine.
De Beers Canada, which employed 747 staff and contractors at
Snap Lake last year, has not turned a profit at the underground
mine since it began production in 2008. The company had planned
for operations to continue until 2028.
Groundwater problems at the mine, which extracts diamonds
from beneath Snap Lake, have added to high costs at the site,
which is accessible only by air and an ice road that operates
for two months of the year. It produced 1.2 million carats last
year.
"Any time these scenarios come forward, where the cycle is
challenging, everything's on the table and everything's looked
at including the option of what would we do if we had to go into
any kind of a care and maintenance or closure situation," said
De Beers spokesman Tom Ormsby. "Nothing's off the table."
Global diamond miners have cut output and lowered prices in
the face of slowing demand growth in China and a glut of supply.
Prices for rough stones are down 18 percent from last year,
data from roughprices.com shows, while polished diamond prices
are down 20 percent year-to-date, the Rapaport Group said.
De Beers, which is 85 percent owned by Anglo American Plc
AAL.L and 15 percent owned by the government of Botswana, is
the world's largest diamond producer. It has cut global
production three times this year.
De Beers Canada said in October that its new Chief Executive
Kim Truter would relocate the company headquarters to Calgary as
part of a restructuring to cut costs.
The company, which also operates the Victor diamond mine in
Ontario, continues to build the Gahcho Kue mine in the Northwest
Territories, with 49 percent partner Mountain Province Diamonds
Inc MPV.TO . Gahcho Kue is expected to start production in late
2016 and operate for 11 years.
The company is also reviewing Victor and Gahcho Kue, Ormsby
said, to determine if efficiency or operations could improve.