Gahcho Kue, the world’s largest new diamond mine in the last 13 years, officially started commercial production on Thursday (March 2). The announcement marks an important operational milestone and also comes slightly ahead of schedule, despite some disruptions caused by extremely cold weather.
The mine, located about 280 kilometers east of Yellowknife in Canada’s Northwest Territories, is expected to produce approximately 54 million carats of rough diamonds over its 12-year life span.
It is a joint venture between De Beers, which is owned by Anglo American (LSE:AAL), and Mountain Province Diamonds (TSX:MPV,NASDAQ:MPVD). It took more than $1 billion to develop, and is estimated to be one of the world’s 10 biggest diamond mines.
“Today marks a significant landmark for De Beers in Canada as Gahcho Kué becomes an important contributor to the group’s global production,” De Beers CEO Bruce Cleaver said.
So far the mine has provided a $341-million boost to the economy of the Northwest Territories, and has contributed a further $272 million to the rest of Canada, according to De Beers.
“Gahcho Kue is a rich diamond deposit that secures Canada’s position as one of the world’s leading diamond producers,” Mountain Province Diamonds President and CEO Patrick Evans said.
The mine is only the sixth precious rocks operation to open in Canada in the 18 years that the country has mined diamonds. It will be comprised of three open pits and will employ approximately 530 people.
Production ramp up began seven months ago, on August 1, a month before the official opening celebration for Gahcho Kue. Earlier in February, workers at the mine discovered a large 68-carat diamond, the biggest found since the mine opened.
“It’s a result of [the partnerships that have worked together] that the mine is set to deliver socio-economic benefits of more than C$5 billion to the economy of the Northwest Territories over its lifetime,” Cleaver said.
In addition to having a positive economic impact, the opening of the mine is expected to offset production drop offs from two of the country’s major diamond operations, Diavik and Ekati. Both are approaching the ends of their productive lives.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.