De Beers Shuttering Canada Diamond Mine in Commodities Rout

  • Snap Lake mine being put on `care and maintenance' status
  • More than 400 workers in Northwest Territories losing jobs

A diamond mine in Canada’s Northwest Territories is the latest casualty of slumping commodity prices.

Anglo American Plc’s De Beers said Friday it started the process of shuttering its Snap Lake diamond mine, putting it on care and maintenance status. Since it opened in 2008, the mine has never made a profit.

“We were in it for the long term, but when the prices went down this year, that just pushed that window for profitability out too far,” Tom Ormsby, a spokesman for De Beers Canada, said by telephone from Yellowknife.

The company will decide in the next year whether the mine is viable longer-term; De Beers had expected it to operate until 2028. De Beers said 434 employees will lose their jobs immediately. About 120 will continue to work for the next one to nine months as operations are suspended, and 70 will be employed beyond that to maintain the mine.

“The men and women at Snap Lake have put enormous effort into this challenging ore body over many years, but even the gains made this year are not enough to overcome the market conditions and put us in a profitable position,” De Beers Canada Chief Executive Officer Kim Truter said in a statement.

Prices for just about everything that comes out of the ground have been falling, and diamonds are no exception.  Polished-diamond prices have declined about 30 percent since 2011, according to an index from PolishedPrices.com. Prices for rough, uncut diamonds have dropped 44 percent over the same period.

Located in a remote area 220 kilometers (137 miles) northeast of Yellowknife, Snap Lake is Canada’s only fully underground diamond mine and was De Beers’s first diamond operation built outside Africa.

It had an annual production capacity of 1.4 million carats and a processing capacity of 1.1 million metric tons, according to the company’s website.

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