Anglo’s sale of De Beers hindered by diamond market state
Anglo American has warned of more production cuts at De Beers due to reduced spending by Chinese consumers prolonging the market downturn.
World number two diamond producer De Beers has put its shuttered Snap Lake diamond mine in Canada’s arctic up for sale according to a new report.
Reuters reports De Beers, a division of Anglo American has engaged Bank of Montreal to market the underground mine which has been on care and maintenance since December, according to spokesman Tom Ormsby:
“De Beers Canada spent C$2.2 billion ($1.67 billion) on mine construction and operation up to year-end 2014.
If no qualified buyer is found, De Beers Canada may proceed with the flooding plan in the fourth quarter, Ormsby said.”
The mine in the Northwest Territories which has never turned a profit since beginning production in 2008.
Snap Lake was the firm’s first diamond mine outside of Africa, and Canada’s first primary underground diamond mine. The mine employed 747 workers and produced 1.2 million carats in 2014 and was scheduled to stay in production for another 12 years.
Last year De Beers, part-owned by the government of Botswana, ended more than 125 years of diamond mining history in South Africa by selling its last remaining producing assets in Kimberley, the city that was the centre of a 19th century exploration frenzy.
A De Beers and Mountain Province Diamonds joint venture in the Northwest Territories called Gahcho Kué, the largest new diamond mine under development globally, is progressing according to plan and budget with production planned for this quarter. Gahcho Kué is forecast to produce an average of 4.5 million carats a year over a 12-year mine life.
