Jewelry Business Insight

De Beers Will Close the Victor Diamond Mine in Ontario, Canada

De Beers Will Close the Victor Diamond Mine in Ontario, Canada

International diamond conglomerate De Beers has announced that it will close the Victor mine, the first and only diamond mine in the Canadian province of Ontario, in 2019.

The mine began production in 2008 and was expected to have a lifespan of 17 years. To date, it has yielded about 7 million carats of rough, and currently employs around 350 full-time employees and more than 100 contractors.

In 2014, De Beers proposed an expansion plan that could have extended the life of the mine, but negotiations with the Attawapiskat First Nation, located immediately adjacent to the Victor site, collapsed after the parties could not come to an agreement on conditions for the expansion.

De Beers now says it would not be economically viable to extend the life of the mine.

The Victor mine has been a contentious project on several fronts. Last year, an environmental group sued De Beers, alleging the company did not adequately monitor levels of toxic mercury in the vicinity of the mine. In 2013, residents of Attawapiskat blockaded an ice road leading to the mine, demanding to update the Impact Benefit Agreement (IBA) – the document laying out how Attawapiskat would benefit from mining operations - to include a zero-tolerance policy for racism and discrimination, address pay equity, and include provisions for new housing and school facilities.

The Relationship Between Attawapiskat and De Beers

Attawapiskat First Nation approved the Victor mine project after more than two years of negotiations with De Beers. According to De Beers representatives, the company faced an uphill battle to gain the trust of local leaders in the community.

“[De Beers was seen] as a pariah… [A] lack of trust, coupled with a lack of understanding about the project, was compounded by language issues and the absence of applicable words in the local dialect to explain what was planned,” said an anonymous De Beers employee about the Victor mine negotiations.

While the mine brought hundreds of jobs to the remote community, it was also revealed that between 2008 and 2014, De Beers only paid out $226 in royalty payments as a result of mining operations.

The company spent around $1 billion to develop the mine and has stated that those costs had to be recouped before royalty payments would start being paid out. Royalty payments from the mine were also mandated to go to the government of Ontario, not Attawapiskat First Nation.

Strained relationships exist nationwide between resource extraction companies, First Nations, and provincial and federal governments in Canada.

In July, protesters set up camp at the site of a proposed tungsten and molybdenum mine in the province of New Brunswick. In 2014, protesters occupied a proposed copper and gold mine in British Columbia.

Nathan Munn |

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