At long last, it’s a go for Jericho

The minister of Indian and northern Affairs, Andy Mitchell, has accepted the Nunavut Impact Review Board’s advice and said yes to the Tahera Corp.’s Jericho diamond mine, Canada’s fourth and Nunavut’s first, creating scores of possible job openings for Kitikmeot residents.

“It certainly paves the way for us to get on to that next stage, which is getting the permits in place, the water permit and the land leases,” said Greg Missal, Tahera’s vice president for Nunavut affairs.

Missal said the company hopes to start shipping construction materials to Jericho via the winter road from Yellowknife in February. After about a year of construction work, Tahera hopes to dig up diamonds by late 2005 or early 2006 for sale to an as-yet-unspecified buyer.

The company estimates the mine will operate for eight years, unless its exploration efforts turn up new, commercially viable kimberlite deposits.

This week, Tahera signed a deal with De Beers Canada Exploration Inc., under which Tahera will explore for diamonds on De Beers’ land next door to Jericho. Tahera will earn itself a 50 per cent share of any diamonds produced from the area – if its four promising kimberlites turn out to hold commercial quantities of diamonds.

Under the recent Inuit impact and benefits agreement between Tahera and the Kitikmeot Inuit Association, Kitikmeot Inuit could get up to 60 per cent of Jericho’s mine construction and production jobs – within five years of the mine’s startup.

That would include at least some of the 45 to 120 people who will be needed to construct the mine and an on-site diamond processing plant. Between 48 and 116 people will be needed for three years to work on open-pit mining, while another 48 people will work for two years in underground mining.

The processing plant, to be built and managed by a South African company called Dowding, Reynard and Associates, will employ about 40 people for eight years.

Missal said the federal government’s approval of the project will now make it easier for the company to find investors willing to put up the $53 million that Tahera needs to pay for the Jericho mine’s startup costs.

“The financial institutions are very aware of what federal approval means for a project,” Missal said.

They’re also still seeking a buyer for the rough diamonds that Jericho will produce.

Though Tahera’s agreement with the Kitikmeot Inuit Association contains a provision saying that KIA and Tahera may one day talk about supplying some rough diamonds to a local firm, Missal said that’s not likely to happen soon.

He said that Tahera is looking for a marketing arrangement where they would sell everything they produce to one outside buyer.

Nuna Logistics, owned by the Nunasi Corporation and the Kitikmeot Corporation, is the “preferred” contractor for the construction project. Nuna Logistics will start by building a camp, diesel storage, workshop, explosive storage and on-site ice access roads.

Located about 25 km northwest of the soon-to-expire Lupin gold mine, about 350 km southwest of Cambridge Bay, the Jericho mine is small when compared with the two giant diamond mines now operating in the Northwest Territories, Diavik and Ekati, and De Beers’ Snap Lake project north of Yellowknife, which received federal approval June 3.

Diavik, for example, cost more than $900 million to construct, and is roughly 20 times the size of the mine proposed by Tahera.

After a lengthy environmental screening and review, the Nunavut Impact Review Board recommended early last February that the federal government approve the Jericho mine.

But as time passed, Nunavut leaders grew impatient with what they perceived to be unnecessary foot-dragging by federal officials. In May, Premier Paul Okalik wrote to Geoff Regan, minister of fisheries and oceans, accusing his department of imposing needless delays in its review of the NIRB’s recommendations.

Just last week, Okalik again accused Ottawa of delaying the project for no valid reason.

Meanwhile, the Inuit of the Kitikmeot will be looking to their IIBA to protect their social and economic interests.

Here are a few highlights from the KIA-Tahera IIBA:

* Tahera will use its “best efforts” to reach a 60 per cent Inuit employment level by Year 5 of the project;
* Tahera will post Jericho job vacancies in all Kitikmeot communities – if no qualified candidates are identified after a 10-day waiting period, Tahera may hire workers from the outside;
* Tahera commits to requiring a mimimum Grade 10 education for entry level jobs, but may adjust entry requirements for Inuit applicants;
* Two-week-in, two-week out work rotations will be used during diamond production, and four-week-in, two-week-out work rotations will be used during exploration, construction and development;
* All jobs at Jericho will be open to Inuit with the ability, work skills, experience, and necessary qualifications – Tahera will consider equivalencies instead of paper qualifications, where appropriate;
* All employees must submit to security checks before they’re hired, and all employees must obey on-site security rules similar to those used at other diamond mines.