Federal Government Catches Diamond Fever [Mar 16/98]

March 16, 1998 (Yellowknife, N.W.T.)--Canadians are being kept in the dark by the federal government about environmental and socio-economic impacts of what may become the world's second richest diamond mine, according to the northern public interest organization Canadian Arctic Resources Committee (CARC). "We were shocked to learn on a brief CBC northern radio interview last Friday morning that junior federal officials met in one day behind closed doors and decided that only the mid-level environmental review, called a Comprehensive Study, would apply to the Diavik Diamonds Project," said Kevin O'Reilly CARC's Research Director.

The Department of Indian Affairs and Northern Development (DIAND) decision of March 12, 1998 states: "We do not presently have clear indications that the environmental effects of the proposed project will be uncertain or significantly adverse or that there is significant public concern." This was used as justification for the decision not to refer the project to a higher level of environmental assessment under the Canadian Environmental Assessment Act (CEAA).

Diavik Diamond Mines Inc. is 60% owned by Rio Tinto PLC of London, England, the world's largest mining company and 40% by Aber Resources Ltd. of Vancouver. Diavik estimates production from the 16-22 year project will be worth $5.8 billion and plans to spend $875 million to develop the mine on top of the $70 million spent to date on exploration. The mine is expected to provide 600 construction jobs and 350 during production and will pay about $70 million in royalties to the federal government on an annual basis. Last year's exploration yielded results that increased its resources by 85%. The proposed mine is located 300 km northeast of Yellowknife and just 35 km to the southeast of BHP's Ekati diamond mines. Production from the Diavik project will come from four kimberlite pipes located under Lac de Gras, the headwaters of the Coppermine River.

CARC is concerned with the federal government's decision to require a Comprehensive Study of the Diavik project. "DIAND had 30 days to review the three volume project description submitted by the company but decided on a Comprehensive Study less than a week later and no one outside government was asked to participate," Mr. O'Reilly explained. "There was little, if any, effort to consult northerners that we are aware of in the three full working days the project description was under review," he added. "Did federal officials miss the more than 130 pages of issues and public concerns documented by the company as part of their submission? We hope the conduct of the federal government, so far, is not indicative of how the public will be involved and how the Comprehensive Study will be carried out."

"We have continually raised fundamental questions about this project and the cumulative effects with nearby exploration and development without adequate responses from federal authorities or the company," stated O'Reilly from CARC's Yellowknife office. "For example, Canada's first diamond mine, BHP's Ekati Mine, went to great lengths to make it clear that they would not be depositing anything directly into Lac de Gras as part of a higher level environmental assessment process. The Diavik proposal involves constructing massive dykes and draining parts of Lac de Gras. We don't share the government's certainty about no significant adverse environmental effects from a mining project of this scale on the Coppermine River watershed," said O'Reilly.

The Diavik assessment will be the first time the federal government conducts a Comprehensive Study in the Northwest Territories. The decision by federal officials did not set out a plan for public involvement and there is no indication of participant funding to allow for an independent technical review. Public involvement and participant funding are now at the discretion of the DIAND. DIAND officials, when asked by Mr. O'Reilly, how they planned to announce the decision on the assessment track for the Diavik project, responded that they had informed the company by letter and that there would be no press release.

CARC urges the Northwest Territories and Aboriginal governments, environmental groups and the concerned public to insist the federal government acts responsibly to ensure the best in public involvement and a rigorous independent scientific and technical review during this Comprehensive Study. "We are concerned that the unseemly haste of the government to fast forward this project will shortchange all of us, including Diavik," O'Reilly said. "Environmental assessment is in place to ensure resource development is conducted without significant damage to our environment or northern peoples, and without causing undue cost or delays to a project."

Based in Yellowknife and Ottawa, CARC is a non-profit public interest group, with expertise in northern public policy. The focus of its 8,000 members across Canada and around the world is to promote sustainable development in its broadest sense, including environmental, economic and cultural sustainability.

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For further information, contact:

Kevin O'Reilly
Research Director
Canadian Arctic Resources Committee

(867) 873-4715 Phone
(867) 873-3654 Fax
email: xcarc@ssimicro.com