NORTHWEST TERRITORIES
The proposed Gahcho Kue project, which could develop into the NWT's fourth diamond mine, was approved on Oct. 22 by Aboriginal Affairs Minister Bernard Valcourt.

Two drills work away at the Gahcho Kue Joint Venture exploration site, located 280 kilometres northeast of Yellowknife. The Gahcho Kue mine project received approval from the federal government on Oct. 22. - photo courtesy of De Beers Canada

The next phase for the project, operated jointly by De Beers and publicly-traded, Ontario-based Mountain Province Diamonds, will be to apply for a land use permit and water licence from the Mackenzie Valley Land and Water Board, which will allow the mining partners to begin the anticipated two-year construction process.

"We are on our way to having our third diamond mine in Canada and we're very excited," said Cathie Bolstad, De Beers' director of external and corporate affairs. "We're working on the detailed engineering in association with the construction, and we're hoping for a smooth and efficient process."

The proposed mine, to be located 280 km northeast of Yellowknife, is expected to produce an average of 4.5 million carats of diamonds per year over its projected 11-year mine life.

De Beers estimated Gahcho Kue would contribute $39 billion to Canada's gross domestic product during construction and operation, with 80 per cent going to the NWT. During the construction phase it will employ 690 workers, and operations will require 372, with priority hiring for NWT residents as per a socio-economic agreement between De Beers and the GNWT, according to a news release issued by the company last week.

However, the minister's approval does not shut the book on negotiations with First Nations groups.

Several First Nations groups expressed concerns about the potential social, cultural and environmental impacts of the mine in August after it was approved by the Mackenzie Valley Environmental Impact Review Board in July.

The Lutsel K'e Dene First Nation, Deninu Kue First Nation, Tlicho Government and the Yellowknives Dene First Nation asked for Valcourt to refer outstanding issues back to the review board for further review.

Among the issues raised by the four First Nations groups was the potential impact winter roads might have on the barrenground caribou. One of the three conditions of the project's approval by the review board was that De Beers minimize impacts to the caribou and the area around the mine site, and develop a caribou protection plan prior to construction.

Federal approval notwithstanding, the project still requires more negotiation and consultation with affected First Nations, according to Tlicho Grand Chief Eddie Erasmus, who said he was surprised to learn of Valcourt's decision when contacted by News/North last week.

"There has been review on this proposal and their recommendation to approve the mine with a few measures does not mean that the Tlicho Government has signed off on the mine," he said. "There are a range of agreements that are outstanding. Negotiations are ongoing for an impact benefit agreement with De Beers and satisfaction has not been achieved with these negotiations."

North Slave Metis Alliance president Bill Enge encouraged the minister to approve the project in a letter dated Aug. 22. The Metis group is the only aboriginal group to have signed an impact benefit agreement with De Beers so far.

Now that an approval has pushed the project forward, a resolution to the environmental debate and impact benefit agreement negotiations should be accelerated, Erasmus said.

"What we do need to proceed is a strong environmental agreement, the company needs to ensure that a proper plan is in place for strong and trustworthy environmental agencies," Erasmus said. "We expect a completion of the negotiations that are ongoing and we should try to conclude that – the quicker the better with the impact benefit agreement."

Leaders from the other three groups could not be reached for comment before press time.

Following the minister's decision on Oct. 22, the director general of the Northern Projects Management Office with the Canadian Northern Economic Development Agency sent a letter to Yellowknives Chiefs Edward Sangris and Ernest Betsina, Deninu Kue Chief Louis Balsillie, and Lutsel K'e Chief Dora Enzoe, responding to their Aug. 22 joint letter.

"While the government is not privy to the negotiation of private contractual agreements between the developer and aboriginal groups, such as impact benefit agreements, it is nevertheless expected that aboriginal groups will be utilizing these negotiations as a mechanism to meet their specific needs," stated Matthew Spence in the letter.

Bolstad said she is confident progress can be made in negotiations with the First Nations.

"I think we are close to and understand the concerns of aboriginal committees," she said. "We've planned the project to address those concerns. We're confident and it was good to see the minister was also confident."

Mountain Province Diamonds opened Oct. 22 selling at $5.05 per share, then spiked to $5.44 shortly after news of the mine's approval came out, before closing the day back at $5.05, according to the company's website. De Beers is not a publicly traded company.

with files from Lindsay Herman and Daron Letts

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