Braving the cold in search of diamonds
The Gahcho Kue mine operated by De Beers took 25 years to bring to production since the discovery of a kimberlite deposit was found partly under a lake in the far north of Canada. Here, on the edge of the Arctic Circle, logistical challenges and the cost of operating a mine prevent other smaller deposits from being mined.
De Beers learnt expensive and valuable lessons from its C $1bn ($730m) Snap Lake underground mine, which the company has opted to flood after it failed to turn to profit in the harsh environment where 98% of supplies can be brought in only during two months of the year on a road carved across frozen lakes and tundra. Flying in supplies is prohibitively expensive.
Large balance sheets are needed to not only build a mine, but to start production, while profit margins are eroded by high operating costs distorted by the logistics of keeping the mine and staff supplied with electricity, food, materials and equipment.
Allan Rodel, the South African GM at Gahcho Kue, says a Mining Association of Canada study showed that operating a mine near the Arctic Circle added 30% to 40% to operating costs and was one of the reasons for smaller kimberlites falling out of reckoning.
De Beers operates the Victor mine in Ontario, which has hydro power and lower costs than Gahcho Kue, but Rodel declined to give the exact cost per carat for the new mine.
The Northwest Territories are tremendously prospective, but the hostile environment brought on by inclement weather for much of the year makes it a tough and costly place to operate a mine, with De Beers burning its fingers badly at Snap Lake, Canada’s first underground diamond mine.
De Beers’s records show there are 321 kimberlites in the craton in the Northwest Territories, with an estimate of another 50 to 80 undisclosed deposits that have been found. Of these, just 12 have been mined in the five centres of the De Beers’s mines at Gahcho Kue, which it shares with Mountain Province and the suspended and flooded Snap Lake, Dominion Diamond’s Ekati and Diavik mines and the closed Jericho mine.
“Canada’s geology has twice as many cratons as southern Africa, so the potential is huge and thus the reason De Beers has been exploring here for more than 50 years,” says Rodel, pointing out De Beers had discovered more than 200 of those kimberlites.
“There is another aggressive exploration programme in Canada this year, which is a reflection of our confidence of more economic discoveries,” says Rodel.
“One of the big things we’ve learnt from our other projects is that they were under immense cost pressure when it came to construction because the contractors had a lot of guys who had never built a mine in the Arctic and didn’t understand what it was going to do to productivity.
“You are working with steel and tools in minus 40°C,” he says. “This last year, we shut all work down on the primary crusher and refocused all the work to inside of the plant and stopped work outside. It was becoming unsafe.
“What we are also focused on is how to make the mining more economic in Canada, exploring technologies that will help mitigate the high cost of operating in harsh and remote environments, as well as increase the potential for some of the smaller kimberlites to become economic.”
The most critical aspect that would make a difference to mining on the Arctic Circle would be the supply of electricity infrastructure to run the isolated mines in a sparsely populated part of Canada.
There is an argument that a year-round road would be a help, but with Gahcho Kue, for example, having to truck in 43million litres of diesel a year in a seven-week window to power the mine for 365 days, having electricity would be a massive cost saving. It could render other kimberlites economical and create more jobs and income for the region.
“Having access to electricity would be a boost for the cost stability of the mines, as well as reducing the carbon footprint of the mines, as all run on diesel, as do many of the communities in the Northwest Territories,” says Rodel.
CANADA’S GEOLOGY HAS TWICE AS MANY CRATONS AS SOUTHERN AFRICA, SO THE POTENTIAL IS HUGE 321 The number of kimberlites in the craton in the Northwest Territories, De Beers’s records show. There is an estimate of another 50 to 80 undisclosed deposits. THIS LAST YEAR WE REFOCUSED ALL THE WORK TO INSIDE OF THE PLANT AND STOPPED WORK OUTSIDE