Mothballed Nunavut diamond mine floats in legal limbo

An aerial shot of the abandoned Jericho mine site, about 350 kms southwest of Cambridge Bay, and featured on the cover of the NIRB’s 2013-2014 monitoring report. (NIRB PHOTO)

Barrels of waste at Jericho stored within the berm of the main fuel tank farm, observed during 2013 site visit by NIRB staff. (NIRB PHOTO)

Those same waste barrels observed during 2014 NIRB site visit, covered by a tarp. (NIRB PHOTO)

The Jericho Diamond Mine site continues to languish in legal limbo but that hasn’t stopped the Nunavut Impact Review Board from requesting that its legal owner, the apparently insolvent Shear Diamonds Corp., monitor and remedy any ongoing contamination.

But they might be flogging a dead horse.

The fate of the mothballed mine, declared by Ottawa to be “closed or abandoned” in January 2014, seems no clearer today than it was a year ago.

In a Nov. 12 letter to Manuel Rappaport, identified as the director of Shear Diamonds (Nunavut) Corp., the NIRB references its most recent “2013-1014 Annual Monitoring Report for the Jericho Project.”

That report describes a June 2014 site visit in which it appeared, “Shear had not been conducting monitoring activities as required by the Jericho Project Certificate.”

Staff with NIRB who visited the site said there was processed kimberlite — the mineral formations which contain diamonds — outside the kimberlite containment area and that fuels and hazardous wastes on site had standing water within the bermed areas.

“The unsealed and unlabelled barrels found during the 2013 site visit were observed during the 2014 site visit to be covered by a tarp and still stored within the main fuel tank farm,” the NIRB noted in its report.

It was probably Aboriginal Affairs and Northern Development Canada staff who placed the tarp over those mysterious barrels.

Under the Nunavut Waters and Nunavut Surface Rights Act, AANDC can do whatever it needs to do in order to protect property and the environment and, according to correspondence with the NIRB, it continues to do so using money it holds in security from Shear.

But it’s not taking full responsibility for the closed mine.

“The Government of Canada will only step in to manage a site when a project owner fails to meet its legal responsibilities to do so. That being said, AANDC has not taken over management of the Jericho Diamond Mine Project,” AANDC wrote to the NIRB about a year ago.

“Shear Diamonds continues to be responsible for maintaining compliance with the terms and conditions of all authorizations and permits issued for the project.”

The Jericho diamond mine is located 350 kilometres southwest of Cambridge Bay at the north end of Contwoyto Lake.

AANDC declared the mine “closed or abandoned, temporarily or permanently” in a letter to Shear in January 2014.

But at least one of the people addressed in that AANDC letter is no longer with the company.

In a terse email sent to the NIRB on April 23, 2014, Thomas Pladsen, who had been the company’s chief restructuring officer, said, “please take me off the distribution list for correspondence as I resigned as the CRO for Shear Diamonds earlier this year.”

According to the NIRB website, which contains all letters and emails between parties, that note appears to be the only correspondence Shear has had with the NIRB since December 2013.

A detailed project history of Nunavut’s first diamond mine contained on the NIRB website shows that the mine was originally owned by Tahera Diamond Corp.

The mine, which operated from 2006 to 2008, produced 780,000 carats of diamonds from 1.2 million tonnes of kimberlite mined from it’s open pit operation.

Tahera went into bankruptcy protection in 2008 and Shear bought the property in 2010. Shear only produced diamonds at the site for four months in 2012.

As the agency tasked with monitoring these sites, the NIRB continues to point out what needs to be done to meet the legal requirements of the project certificate as well as the various licences and leases held by the company.

The Nov. 12 letter from the NIRB to Shear’s Rappaport requests that the company comply with four main recommendations:

• submit annual reports from 2010 onward along with wildlife monitoring data from 2010 to 2014;

• ensure that fuel storage areas are bermed and meet regulatory requirements and that waste and landfills be controlled so as to deter carnivores;

• provide an update on water monitoring to manage contamination risks from spring run-off, tailings as well as fuel and hazardous waste; and,

• submit a plan of action to regain compliance with all reporting requirements and a plan for what will happen to the site going forward.

That NIRB letter was sent to Rappaport via a Taché Diamonds email address.

Taché Diamonds is part of the DeBeers Group of Companies, according to its website, and has its head office in Antwerp, Belgium. DeBeers, founded in 1888, is the world’s leading diamond company and has dominated the industry for years.

“Taché is seen as an industry benchmark for quality control and reliability,” its website says. “Taché supports both international and local charities around the world. Examples include the Diamond Empowerment Fund, Make a Wish Foundation as well as the many smaller local charities and good causes.”

We contacted AANDC by phone, and Rappaport by email, but did not hear back from them by the time of this publication.