Canada’s Northwest Territories environmental watchdog has handed Dominion Diamond (TSX, NYSE:DDC) a small but key victory by ruling that a planned expansion of its Ekati mine, in Yellowknife, should go ahead.
According to the Mackenzie Valley Environmental Impact Review Board, the project — dubbed the Jay pipe — will in fact cause some impacts to the environment. However, the body said those effects can be avoided and reduced if the company applies 22 required measures, which include:
The board also said Dominion should be commended “for responding to community concerns it heard early in this environmental assessment and significantly changing its project design to avoid the potential impacts”.
Opening up the Jay pipe – by building a dyke, draining part of a lake and digging an open pit – will keep Ekati open for an additional 10 years, to 2030.
Mining the Jay pipe will, according to the project team, require construction of a 4km-long dike in Lac du Sauvage to create an open pit. It will also require building a dyke, draining part of the lake and a new road, which will increase traffic in the area.
Aboriginal groups have raised concerns about the effects of the expansion on the region’s caribou herds, but Dominion has promised it would make every reasonable concession to caribou, including a “road mitigation plan” designed to reduce the risk caribou face from the mining operation.
The board’s recommendation still needs to be approved by the N.W.T.’s Lands Minister, Robert C. McLeod.
If he supports the decision, the company will have to apply for the necessary permits before construction can begin.
Dominion Diamond Corporation hopes to start mining the Jay pit in 2021. The company says Jay will help Ekati remain in operation until around 2033. If not, the mine will run out of its existing reserves by 2020.
