SOMBA K'E/YELLOWKNIFE - While the other two Yellowknife-area diamond mines are cutting back on their operations and development to contend with the global economic crisis, BHP Billiton's Ekati diamond mine is in "healthy" condition due to cost cutting measures the mine began undertaking two years ago, said Deana Twissell, spokesperson for BHP Billiton.

An underground miner at BHP Billiton's Ekati diamond mine (upper right) fills a drilled hole with explosives. BHP says that despite the global economic crisis, Ekati is in healthy shape due to cost reduction measures undertaken by BHP over the past two years. - photo courtesy of BHP Billiton

"We're able to weather the storm a little better than others because of these reductions," said Twissell.

Among the targets that BHP set two years ago: reducing the cost of operations from more than $100 per tonne in 2005 to $70 per tonne by 2009, which the mine has already achieved this year.

"Our objective is to maintain that operating cost and to reduce it even further to bring it to $50 a tonne by 2012," said Twissell.

BHP has reduced the amount of light duty vehicles that operate on-site and has amalgamated its various maintenance departments, added Twissell.

The company is also investing millions of dollars in research on how to extend the life of Ekati, which BHP currently hopes to continue operating past 2040, she added. Ekati currently has two open pit mines and one underground mine in full production.

"We've created a brand new research and development department," said Twissell, who would not reveal exact spending figures for BHP's new investments. "We're looking at innovative mining techniques. This winter road season, we're bringing up two brand new surface miners to do testing in our Fox (open) pit. These two miners can unlock much potential for Ekati for future years to get us to our vision of 2040.

"We're looking at ways of reducing our energy costs instead of burning high cost diesel fuel. Wind power. Hydro power," continued Twissell.

These plans were put in place long before the global economic crisis reared its ugly head in September, she said.

"It's coincidental that we're faced now with this economic crisis. We didn't obviously foresee or anticipate that that would happen. No one did. It's working in our favour that we've already been on this path for the last 24 months," she said

Last week, BHP advised its underground construction contractor, Procon Mining and Tunnelling Ltd., that the mine no longer needs 12 Procon employees now that development of Ekati's underground mine, Panda, is finished, confirmed Tim Matusiak, area manager for Procon.

The cutback is a natural extension of Panda being recently completed, nothing more, said Twissell.

Mike Vaydik, executive director of the NWT and Nunavut Chamber of Mines, said BHP's cost cutting measures for extending the mine life of Ekati is exactly what mining companies should be doing.

But that doesn't mean Ekati has planned its development better than Diavik or De Beers; it's just a reflection of each mine being at a different stage of its development and having to contend with different costs, whether or not they're impacted by the economic crisis, said Vaydik.

"It's a case of where they are in their mine cycle," said Vaydik. "Ekati is five years older than Diavik," which is spending $700 million on becoming a fully underground mine by 2012 and recently announced it will require far less contract workers to complete underground development in time for the third quarter of 2009.

"Diavik is making the same decision right now about investing in the underground that Ekati made probably five years ago. I wouldn't read any more into it than that."