De Beers could sink C$2.5 bln into Canada by 2009
Fri January 28, 2005 8:28 AM GMT+02:00
By Nicole Mordant
VANCOUVER, British Columbia (Reuters) - De Beers could spend nearly C$2.5 billion in Canada over the next five years, exploring for diamonds and building mines if the search is successful, a De Beers executive said on Thursday.
The world's biggest diamond producer and a name synonymous with the sparkling gems, has already spent more than C$1 billion in Canada over the past 40 years searching for stones and now developing its first mine.
"But the (C$1 billion) investment pales in comparison to our planned expenditures over the next five years if all goes well," said John McConnell, vice president of projects in Canada's Northwest Territories.
McConnell's presentation to delegates at an exploration conference in Vancouver showed that De Beers could spend C$2.3 billion between 2005 and 2009 on four projects in Canada -- Snap Lake, Victor, Gahcho Kue and Fort a la Corne. Included in the total is some C$150 million for exploration.
The figures give some insight into the thinking of De Beers, a private company that is generally close-mouthed about its business, and which is owned 45 percent by Anglo American Plc.
Of the projects, most funds are earmarked for the Victor deposit in Northern Ontario, C$957 million, and the Snap Lake project in the Northwest Territories, C$774 million, where mine construction is due to start in April.
McConnell said that the permitting of Snap Lake, which took about three years, had cost between C$90 million and C$110 million. Snap Lake should be Canada's fourth diamond mine if it starts up on schedule in mid 2008.
Equipment will start being moved in a few weeks time along a winter road to Snap Lake, a diamond-bearing dyke underneath a lake some 220 kilometres (138 miles) northeast of Yellowknife, the capital of the Northwest Territories, and just south of the treeline.
McConnell said the project, bought by De Beers in 2000 for C$478 million, has faced a number of challenges, including keeping lake water out of the mine, and higher fuel, cement, steel and wage costs. He also said it has been difficult finding enough skilled workers in the remote Northwest Territories, where Canada's two operating diamond mines are located.
A third, much smaller, mine, Tahera Corp.'s Jericho project in Canada's Nunavut territory, is expected to start up in 2006.
