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More jobs cut at Diavik
Workforce fluctuations continue as Diavik Diamond Mine becomes fully-underground operation

Thandiwe Vela
Northern News Services
Published Wednesday, Sept. 26, 2012

Twenty-eight jobs are being cut at the Diavik Diamond Mine, following another workforce reduction at the mine announced earlier this month.

NNSL photo/graphic

More workforce reductions have been announced by Diavik Diamond Mines Inc., as the diamond mine becomes an all-underground operation. Here, cementation mechanic Rodney Gray repairs a bolter rig about 358 metres underground at the mine. - photo courtesy Diavik Diamond Mines Inc.

The latest cuts come from across the mine's departments, including 17 Diavik employees, eight layoffs for Diavik contractor Tli Cho Logistcs Ltd., and the layoff of three Bouwa Whee Catering Ltd. temporary employees.

More workforce reductions are expected at Diavik after the mine completed its transition this month from a mostly open-pit operation, into a more expensive, more equipment-intensive, fully-underground operation.

"It is a transition -- an important transition that we're going through as a business, and one which we can't ignore," said Niels Kristensen, Diavik Diamond Mines Inc. president and chief operating officer, noting the pricier underground mining operations also come with lower productivity than open-pit mining. "We can't carry on business as usual under that scenario."

"We have to keep looking at how we can work smarter and work more efficiently--which is the work that we're doing.

"There could be some further impacts on people, that is something that any business on an ongoing basis will always look at, to try and be more efficient," Kristensen said.

Operational improvements have been made across all departments at the mine, Kristensen said, in an effort to reduce the impact on employees.

The mine's workforce has fluctuated greatly over the last three years, including the addition of 400 jobs at Diavik as the operation ramped up underground mining and continued open pit mining--reaching a peak workforce of about 1,200.

As open pit operations drew to an end, 145 open pit jobs were cut over the past two years, from the mine's Inuit and Dene Company (I & D).

Diavik announced earlier this month that alternate jobs had been found for all but 26 of the 145 laid-off employees and that number had decreased to just 16 I & D employees out of work as 10 more had been placed in jobs as of last week.

"The closure of the open pit has been a big success story in terms of managing that transition from 145 -- to at the end of the day -- 16 that we could not find alternative roles for," said Kristensen.

The 28 job cuts are in addition to the I & D layoffs, and come as the mine also faces challenges with market diamond prices for the industry.

"At the moment, we're all going through a pretty tough time," Kristensen said. "At the end of the day, it's a combination of external factors like diamond prices, and internal factors like our change to the underground operations and the challenges associated with that. It's a combination of those factors and it just means we have to keep on looking at how we can improve. Its about ongoing ways of looking at how we can improve the business, and make the business more efficient and offset some of these pressures that we're under."

Longer-term fundamentals are "very strong" for the diamond industry, Kristensen said, noting the demand for diamonds is expected to exceed supply in the longer term.

"We've got a very strong future for us," he said. "We've got a business which is employing over a thousand people, a business which is providing billions of dollars of benefits to the North, to Northern companies and other Northern businesses, and a business that is here for many, many years to come. What we're doing is to ensure that this business is strong and thriving."

According to the latest life-of-mine plan, Diavik, which is currently valued at $2.6 billion, is expected to continue production into 2023, on condition of the development of its fourth kimberlite pipe, A-21.

Approval of A-21, which will cost more than $500 million to develop, is expected to be passed by the end of the year.

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