The impact of the loss of the Snap Lake mine will land eventually but it is clear skies for now, at least for Northwestern Air Lease (NWAL).
When De Beers Canada announced on Dec. 4 it would stop regular operations at the diamond mine 220 kilometres north of Yellowknife, NWAL general and operations manager Brian Harrold figured the company’s bi-weekly runs from Fort Smith and Hay River every other Wednesday would cease.
Usually the flight brings one or two from Fort Smith and picks up seven or eight more, sometimes 10, in Hay River, and brings back eight to 11 on return. The company used to bring as many as 14 back but that’s pared down, as has an extra Tuesday night run to the mine on the opposite week, which went only three times before it was cancelled in the wake of the mine announcement.
On Dec. 7, though, he found out that is the only business NWAL stands to lose in the near future.
“We thought we were going to lose all the Snap stuff (but) I just got the email (Monday) that we’re still doing the same thing,” Harrold said, speculating that some of the Hay River and Fort Smith employees may have specialized skills still needed at the mine. He noted one of the Smith employees is a cook. “We’re not seeing any impact at all. Who knows what happens down the road, but I’m still fairly positive.”
Anglo American PLC, which owns 85 per cent of De Beers (it is 15-per-cent owned by the government of Botswana), revealed last week the Snap Lake closure is but part of a wider effort to cut costs at the company as it has plans to reduce its workforce by 63 per cent or about 85,000 employees worldwide.
The company, which also operates the Victor diamond mine in Ontario, continues to build the Gahcho Kue mine in the Northwest Territories, with 49 per cent partner Mountain Province Diamonds Inc. Gahcho Kue is expected to start production in late 2016 and operate for 11 years.
Snap Lake spent $182 million in the North in 2014 and $2.2 billion in total since 2005, including $863 million with Aboriginal companies. It has created nearly 7,000 person-years of employment, with 2,309 of them worked by Northerners.
NWT businesses provide critical goods and services to Snap Lake, including personnel for site services support, transport of fuel and supplies on the winter road, logistics and passenger flights, catering, environmental monitoring, explosives, pipe valves and fittings, screening for underground ground support, shotcrete and other supplies, according to the company.
Diamond mines created more than $574 million of GDP in 2014, spending more than $20 million in property taxes and more than $5 million in fuel taxes.
Suspension work at Snap Lake, which employed nearly 750 people during production, will require approximately 120 employees. Once that phase is completed, the care and maintenance phase will require approximately 70 employees. Forty-one employees have been transferred to De Beers’ Gahcho Kué Project, with the potential for another 60 to transfer at some point in 2016. A total of 434 employees have been laid off from Snap Lake with 16 weeks’ notice.
The company’s CEO has said it would try to keep as many Northerners on as possible. Most NWT residents who work at the mine live in Yellowknife (see chart below). The next largest groups are in the Tlicho region, and Hay River, with about 30 workers each.
“We understand it’s around 20 to 30 jobs,” Hay River Mayor Brad Mapes said. “Some of our people that were affected have their positions moved over to the new (Gahcho Kué) De Beers property, but it is a concern to the town. It’s not just their jobs, it’s kind of a ripple effect.”
Elected in October, the former town councillor and still-entrepreneur was concerned about the town’s economy before the Snap Lake announcement.
“I think Snap Lake was always something they were going to look at in the future,” Mapes said. “The future was bleak for them for a few years. It’s just hard to swallow – I don’t think anybody expected it to happen that quickly. The economy is kind of bad enough in our community, so it’s kind of affected (us that way).”
Mapes, like Harrold, is staying positive.
“There’s really nothing that we could do,” he said. “We can’t go back to De Beers and say ‘Give us those jobs back.’ It’s done, right? No one expects anybody to run something that doesn’t make any money. We also have to understand this is something that was going to come down. Every mine has a shelf life to it. We were on borrowed time with that Snap Lake project already, so in some ways we should probably be happy with the time frame we did have.”