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BHP cuts costs to extend Ekati life

Guy Quenneville
Northern News Services
Published Wednesday, October 21, 2009

SOMBA K'E/YELLOWKNIFE - BHP Billiton is cutting costs to ensure that its Ekati diamond mine - the territory's first such mine, having begun production in 1999 - is around for longer than people might expect.

As outlined in BHP's 2008 Sustainable Development Report, the company, under a plan entitled "Vision 2040," is taking aggressive measures to lower its cost of operations in order to extend Ekati's mine life to 2040.

"BHP Billiton continues to work diligently at reducing its operating costs at Ekati Diamond Mine and has set a target to achieve $50 per tonne by the end of 2012," said Deana Twissell, spokesperson for BHP. "We have been on this track for over two years and have been successful at bringing down our operating costs to below $70 per tonne."

The company has also spent millions of dollars on research aimed at extending the mine life.

Last year, BHP purchased two continuous mining machines which cut the kimberlite rock and reduce the need for drilling and blasting.

In addition, BHP has reduced its energy consumption on site.

"In 2008, our diesel costs were $60 million," the development report states. "This expenditure is continually scrutinized for reductions. Once such reduction was brought about by piping heat from the power plant to hear underground mine air.

"Our ongoing No-Idle campaign provides for substantial reduction in diesel use in light vehicles, and our new shuttle service trims down the need for a large fleet of service vehicles at the mine."

By reducing costs and continuing research, "we can then consider mining other kimberlite pipes that are not currently in Ekati's mine plan and extend Ekati's mine life beyond 2021," said Twissell.

Ekati currently employees 1,442 people. Of BHP's workforce, 60 per cent are Northerners and of that number, 55 per cent are aboriginal.

How much life is left in NWT mines overall - including Diavik and Snap Lake - and what this means for the economy of the NWT was a point of concern at last week's Strategic Northern Infrastructure Symposium.

Kim Truter, president of Diavik Diamond Mines Inc., predicted a "dramatic decline" in the territory's GDP, of which the diamond mines account for half, according to several speakers at the symposium.

In a recent economic review released by the GNWT, mining is said to account for $1 billion of the GDP and provides 2,000 direct jobs.

Chantal Lavoie, chief operating officer of De Beers Canada, which currently operates the Snap Lake Diamond Mine and is working on the feasibility for the Gahcho Kue joint venture with Mountain Province Diamonds, had a similar message for symposium delegates.

"There's some great mines right now in operation," said Lavoie "There's possible mines coming, like Gahcho Kue. But what people need to realize is that, most likely, on the assumption that Gahcho Kue gets permitted, gets the go-ahead, by 2025, there won't be much left here in terms of diamond mining."

Cutting down on operating costs at the diamond mines by reducing consumption of fuel is key to ensuring they live past 2025, he added.

"If we can lower the costs, and obviously power costs, that mine would be around by 2040," he said of Snap Lake. The mine began commercial production last year with an expected life of 20 years.

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