ARCTIC-CIRCLE MINING
Braving the cold in search of diamonds
Operating a mine near the Arctic Circle adds 30% to 40% to operating costs, says South African general manager at Gahcho Kue
The Gahcho Kue mine operated by De Beers took 25 years to bring to production since the discovery of a kimberlite deposit was found partly under a lake in the far north of Canada. Here, on the edge of the Arctic Circle, logistical challenges and the cost of operating a mine prevent other smaller deposits from being mined. De Beers learnt expensive and valuable lessons from its C$1bn ($730m) Snap Lake underground mine, which the company has opted to flood after it failed to turn to profit in the harsh environment where 98% of supplies can be brought in only during two months of the year on a road carved across frozen lakes and tundra. Flying in supplies is prohibitively expensive. Large balance sheets are needed to not only build a mine, but to start production, while profit margins are eroded by high operating costs distorted by the logistics of keeping the mine and staff supplied with electricity, food, materials and equipment. Allan Rodel, the South African GM at Gahcho Kue, says ...
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