Licence approved
Diavik security deposit to reach $116 million

Doug Ashbury
Northern News Services

Yellowknife (Aug 23/00) - Diavik will have to back up its water quality promises with cash and extensive monitoring under conditions of the diamond mine's recently-approved water licence.

Water will be monitored at 68 stations at the Lac de Gras mine site, located 300 kilometres northeast of Yellowknife.

"Many of the intervenors at the public hearings identified assessment of the acute and chronic toxicity of the mine effluent as an important element of an overall monitoring program.

"For this reason, a suite of toxicity tests has been identified in the surveillance network program," the NWT Water Board said in the licence, approved by Indian Affairs and Northern Development Minister Robert Nault, last Wednesday. Public hearings were held back in December.

Another is the security deposit schedule covering the seven-year licence.

Diavik will be required to post a security deposit each year which will be worth $116 million in 2007.

The deposit would cover unpaid cleanup costs.

In all, the licence spans 90 pages.

"It's a very complex licence, with well over 100 conditions," Diavik spokesperson Tom Hoefer said Monday.

A Diavik technical team will spend several weeks reviewing the licence, he adds.

Hoefer declined to speculate what would happen if the company were to find any conditions it felt it could not meet, saying they would be dealt with at that time.

Approximately 80 workers will remain on paid standby until the company completes its technical assessment of the licence. They were placed on standby when Diavik used up the water allotment it was allowed under a 'B' licence.

If the owners -- Rio Tinto owns 60 per cent of the Diavik diamond project while Aber Resources owns the remaining 40 per cent -- determine the licence is acceptable, it will then be in a position to move the $1.3- billion project into full construction.

There are currently about 150 workers are at the site. During peak construction, there could be 1,100 workers at the site, 40 per cent of whom are required to be Northerners.

Diamond production is anticipated to begin in the first-half of 2003.

The water licence was the final approval Diavik needed. Talks on participation agreements with the Kitikmeot Inuit Association, Lutsel k'e Band, and Yellowknives Dene are continuing.