Diamond mine near P.A. wins environmental approval
The provincial government has signed off on a Saskatoon mining company ’s plan to build a diamond mine east of Prince Albert, ending what is believed to be the longest environmental approval process in Saskatchewan history.
The announcement is sure to please Star Diamond Corp. and its investors, many of whom have sunk their savings into the project only to grow increasingly frustrated by delays, a lack of information and languishing share prices.
It is not, however, likely to please members of nearby James Smith Cree Nation. A consultant hired to speak for the First Nation told the Saskatoon Starphoenix earlier this month that Star Diamond’s environmental plan was “hopelessly flawed.”
In a statement Thursday, Environment Minister Dustin Duncan said the $1.4-billion twin open-pit diamond mine proposal has met government requirements, but that developments can only proceed after “appropriate environmental safeguards” are in place.
“I am confident this project has met these requirements and the conditions of approval will mitigate environmental and community impacts,” Duncan said more than four years after the company submitted its final environmental impact statement.
The announcement on Thursday marks a significant milestone for Star Diamond — formerly known as Shore Gold Inc. — which has been working to build a mine in the kimberlite-rich Fort a la Corne forest since the mid-1990s.
The project is expected to create hundreds of construction jobs, employ about 700 people once it is operational and return about $6 billion in taxes and royalties to the province over its expected lifespan of 34 years.
Star Diamond CEO Ken Macneill said in a statement that he is “very pleased” that the proposed project has received approval and that the decision marks a “major milestone” toward the development of a diamond mine in Saskatchewan.
The approval is likely also good news for Rio Tinto Exploration Canada Ltd., a subsidiary of one of the world’s largest mining firms that has the option to buy up to 60 per cent of the project in stages for a total of about $75 million.
Paul Zimnisky, an independent diamond industry analyst based in New York, said that while concerns about capital expenditures remain, the approval is likely the “last piece of the puzzle” when it comes to Rio Tinto’s diamond-intensive plans.
“At this point, I think there’s a very high probability that it gets built,” Zimnisky said, referring to the company ’s recent expressions of enthusiasm for the diamond industry.
A spokesman for the international mining giant referred comment to Star Diamond.
In an interview earlier this month, James Smith Cree Nation spokesman Winston Mclean suggested the First Nation’s accommodation demands, including access to resource revenues, were not being met and “everyone else (will get) wealthy.”
While revenue sharing appears to be off the table, the government on Thursday confirmed that accommodations will include reserving a portion of the forest for band members’ use and funding for various community and stewardship programs.
Once the surface lease is issued, Star Diamond must provide James Smith Cree Nation with a total of $161,250 for each year of the mine’s lifespan — an estimated $5.5 million — to fund various community and environmental programs.
The province on Thursday also confirmed it will involve the First Nation in environmental monitoring and enter into “an agreement to provide training, jobs and business opportunities for James Smith Cree Nation and other local communities.”
The First Nation is expected to issue a statement on the decision Friday morning.
Star Diamond’s project, currently known as the Star- Orion- South Diamond mine for the properties on which it will be built, was granted federal environmental approval in 2014. Both levels of government must approve the project for it to move forward.
While a green light from the province is not the final step — more permits are required, as well as a plan to finance construction of the mine should it proceed — environmental approval is a major hurdle Star Diamond has now cleared.
In an interview earlier this month, one of the many investors who outlined concerns and frustrations to the Saskatoon Starphoenix said the provincial government was “holding people’s future in the palm of their hands.
“Diamond mining is the least caustic and the least impactful to the environment of all mining types out there,” said Thomas Griffith, who claims to own a sizable stake in the company. “This project should have been approved in four to six months.”
Star Diamond’s share price jumped 25 per cent to $0.34 from $0.27 in the first hour after the approval was announced.