Yellowknife (Jul 05/06) - A $277 million underground expansion project at Ekati diamond mine will help to extend the mine's life for more than a decade.

BHP Billiton, 80 per cent owner of the Ekati Diamond Mine, approved plans for the Koala Underground Project, said Deana Twissell, external affairs officer for Ekati.

The initial production will begin in December, 2007.

"It's anticipated that full production would begin by the mid-calender year of 2009," Twissell said.

With the proposed Koala Underground Project now approved, the mine life at Ekati could potentially be extended to 2017, she said.

The project has potential to extract 9.8 million carats of diamonds over an 11-year production period, said Twissell. When the Koala project does begin, the diamonds are expected to be of high quality. The project will supply 25 per cent of the mine feed while producing 40 per cent of the diamond output by value, said Twissell.

There will be more jobs created, although Twissell wasn't able to pinpoint the exact amount. "There will be job opportunities, likely most in the underground environment but the amount of jobs is undetermined."

The proposed Koala project helps to illustrate that diamond mining in the NWT is a reliable, long-term industry, said Steve Meister, president of the Yellowknife Chamber of Commerce.

"This is not just an overnight sensation," said Meister.

A number of spin-offs in real estate and the service industry will continue to help Yellowknife's economy stay strong, he said.

"I'm glad to see that BHP Billiton has strong faith in the NWT economy and that they continue to invest," he said.

An announcement like this will allow Yellowknife to have sustained growth in the economy, said Chuck Corothers, manager at Home Building Centre. "Hopefully, this type of announcement will lead to other infrastructure announcements around Yellowknife," said Corothers.

Industry allows individuals and businesses to move away from a dependence on government expenditures, he said.

"As long as the company has gone through the environmental regulatory process, it's fantastic," he said.