Burgundy Diamond Mines has sent a letter to the government of Canada’s Northwest Territories and outlined key areas of support it needs to keep the Ekati diamond project viable in the long run.
“Since acquiring Ekati, the team at Burgundy Diamond Mines has worked tirelessly to improve the economic viability of the asset by strengthening the balance sheet, improving efficiencies, reducing costs, optimising sales channels and identifying ways to extend the mine life,” Burgundy’s CEO Kim Truter said in a letter.
“Despite this backdrop, there has been very little support forthcoming. Environmental requirements are getting unnecessarily more onerous, government agencies are inflexible to change, and the burden placed on the asset is increasing. Should this trend continue, then Burgundy will need to revisit the viability of the Ekati asset and focus on growth elsewhere.”
The company said that in order for the mine to be operational until at least 2040 and beyond, it would require changing certain processes. Among the issues the company faces are the cost requirements for mine reclamation deemed by Burgundy too steep for a small mining firm; the slow royalty valuation process by the government that ties up revenue; the possible need to re-negotiate Indigenous Benefit Agreement under the new Mineral Resource Act; the complicated mining permits in the north regions of Canada; and tight water management requirements.
Burgundy argues that keeping the Ekati diamond mine operational would bring taxes and royalties to the local economy, create jobs and support local businesses.
“We are confident that our continued collaboration will bring substantial benefits to the Northwest Territories, fostering economic growth and sustainable development. We look forward to discussing this further in our upcoming meetings,” Truter added.
Theodor Lisovoy, Managing Editor, Rough&Polished
