By Susan Taylor
TORONTO, June 29 (Reuters) - De Beers Canada can flood the
tunnels of its underground Snap Lake diamond mine in the
Northwest Territories under a revised suspension plan approved
by the region's land and water board.
The company is weighing whether to sell, close, reopen, or
continue suspension at the money-losing Arctic mine, which was
shuttered last December due to poor market conditions. Waning
Chinese demand and an industry credit crunch have been hurting
the sector.
Flooding the mine tunnels will cut costs to pump out water
and reduce environmental risk, De Beers Canada said in its
extended care and maintenance plan.
The temporary closure, approved on an interim basis pending
required updates, could run for three or more years, depending
on market conditions.
"The decision is helpful because it really helps us preserve
... a pretty significant resource in the ground," said De Beers
Canada spokesman Tom Ormsby.
Snap Lake, which has made no money since production began in
2008, produced 1.2 million carats in 2015 and was due to run
until 2028.
The operation, which had 595 employees and 200 contractors
before the suspension, currently has some 75 staff for ongoing
care and maintenance work.
In its April application, De Beers Canada said it may
investigate a remote water monitoring system, which would need
no on-site staff. That would require separate approval, the
board said in a decision posted on Wednesday.
Last October, De Beers Canada said new Chief Executive
Officer Kim Truter would move office headquarters to Calgary as
part of a broader restructuring to cut costs as diamond demand
and prices waned.
De Beers Canada also operates the Victor diamond mine in
Ontario, set to close in 2018 unless an expansion proceeds, and
is building the Gahcho Kue diamond mine in the Northwest
Territories with 49 percent owner Mountain Province Diamonds Inc
MPV.TO .
Gahcho Kue is expected to start production in the next few
months with a projected annual output of 4.5 million carats.
De Beers' first mine outside Africa, Snap Lake is 220
kilometers (137 miles) northeast of Yellowknife.
De Beers is 85 percent owned by Anglo American AAL.L and
15 percent by the government of Botswana.
($1 = 1.3003 Canadian dollars)
(Editing by Jeffrey Benkoe)