Richard Gleeson
Northern News Services

Yellowknife (Mar 10/00) - The trucks have started rolling north and blasting will soon begin again at the Diavik diamond mine.

Agreement highlights security deposit to cover mine closure and reclamation peaks at $175 million in 2014, taking into consideration scheduled progressive reclamation estimated at $37 million establishment of an environmental monitoring advisory board composed of representatives of five affected aboriginal groups, Diavik, GNWT, and the federal government board's budget for each of the first two years to be $800,000, with Diavik contributing $600,000, federal government $150,000 and GNWT $50,000

On Wednesday territorial, federal and company leaders cleared the way to allow construction of the $1.28-billion mine to begin by signing an agreement that will formalize the environmental monitoring and restoration of the mine site.

So far, Diavik has awarded about $90 million in contracts, 70 per cent to Northern businesses. Most of the contracts were conditional on getting the approvals necessary to begin construction this year.

Indian Affairs and Northern Development associate regional director general Lorne Tricoteux said on Wednesday a land-use permit to begin construction of the mine will be issued within the next few days.

Though it was not the kind of ringing endorsement Mayor Dave Lovell (who is in Toronto at a mining conference) often delivers on such occasions, deputy mayor Ben McDonald said the mine holds benefits for the city.

"I think most Yellowknifers want the project to go ahead, but they want it to go ahead in a way that will provide benefits to Northerners and not harm the environment," said McDonald. "Not having seen the deal, I'm hopeful those things will result."

In a flurry of press releases issued shortly after the final signature of DIAND Minister Robert Nault was added, the agreement was hailed as an unqualified success by the three parties who signed it.

There is about a month left in the winter road season. Diavik hopes to haul 1,100-1,200 loads up the ice road to allow for this year's construction program. The mine is located 280 kilometres northeast of Yellowknife and 35 kilometres from Canada's first diamond mine, BHP's Ekati.

Five aboriginal groups affected by the mine have yet to sign the agreement.

Legal concerns

The $175-million maximum security deposit is far closer to the $187 million originally proposed by DIAND and the $68 million Diavik initially said would be adequate.

Critics of the environmental agreement negotiation have said it has turned the regulatory approval process on its head.

The agreement specifies the security deposit to ensure the company pays for land- and water-related reclamation of the mine site. But security for water-related liability has yet to be determined.

Water-related security amounts to more than 90 per cent of the total security deposit.

In a tersely-worded, Feb. 14 letter to Tricoteux, NWT Water Board chairman Gordon Wray said it was the board's job to set the amount of the security deposit on water-related issues.

"I do not believe that it is proper or legal to discuss any aspect of the water-related security deposit outside of the process established by the board," wrote Wray, highlighting the word 'legal.'

Tricoteux said Wednesday he has yet to respond to the letter -- "It is still undergoing legal assessment."

Tricoteux said the agreement was worked out before the water licence was issued because it was the last requirement before the government could issue a land use permit.

"I don't think this is a chicken and egg thing," he added. "One thing is clear, we could not issue the land-use permit the company was seeking until an environmental agreement was in place."

Wray was unavailable for comment.

Water licence issues

Participants in the water board hearing have stated public involvement in the water licensing process has been undermined.

Since the public hearing for the water licence was held in December 1999, information has been traded between Diavik and the water board and the board's technical advisory committee.

The public has no opportunity to question the company about additional information, including test results that show the material Diavik proposed to use to construct the large dykes that are an integral part of the mining process is inadequate.

"I think there's a requirement for another hearing to sort all of this out," said Kevin O'Reilly, research director for the Canadian Arctic Resources Committee.

CARC and the North Slave Metis Alliance have asked for judicial reviews of the federal government's handling of the environmental assessment of the project.

CARC has taken the position -- one it says DIAND recommended in the environmental assessment -- that construction of the mine should not begin until all regulatory approvals are in place.

A DIAND official said Wednesday an investigation of alleged quarrying at the mine site without a permit is continuing.