Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Dominion Diamond Corp (TSX, NYSE:DDC), the world’s largest diamond mining company by market cap, is said to be planning the launch of an online sales platform for polished gems unearthed at its legendary Canadian mines Diavik and Ekati.
Delivering an update for both operations Monday, the company said this year it will produce about 7% fewer carats from Diavik mine, in Canada’s Northwest Territories, resulting in cost savings of roughly 16% as underground development at the site wound down.
Based on Diavik’s current reserves, the updated mine plan could support mining until 2023, after which Dominion would spend about Cdn$188 million in reclamation costs, a task expected to be complete by 2030.
At its 80%-owned Ekati mine, Dominion expects to produce 1.22 million carats from the Fox, Misery, Pigeon and Lynx open pits and the Koala and Koala North underground operations. The plan will give this mine an extra six years of productive life.
While the firm did not mention its plans to launch a business-to-business platform, reports indicate the move would help Dominion gain some understanding into the polished diamond markets, which it drew away from, after it sold its Harry Winston jewellery brand to Swatch Group AG last year.
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