Diavik Diamond Mine to Shutdown, Underground Operation to be Halted

Production at the Diavik diamond mine will be stopped for two six week periods and the underground mine will be placed on care and maintenance by the third quarter of 2009, once the majority of its construction is complete. The move is being taken, “to preserve the strength of its operations during the challenging global market conditions,” the mine operator announced Monday.

According to Diavik Diamond Mines Inc. (DDMI), operator of the diamond mine, in addition to the production shutdowns and the further deferral of the start of the underground production, layoffs are also planned. DDMI said it is “accelerating the planned transition to a smaller workforce.” The company said employee reductions “will be achieved primarily by natural attrition.”

During the summer and winter production shutdowns diamond production will cease and the mine will be placed on a care and maintenance schedule. The summer shutdown is scheduled for July 14 to August 24. The winter shutdown is scheduled for December 1 to January 11, 2010.

“Our announcements today will preserve the quality of our assets, and position us for the future. In particular we wish to retain our core workforce and minimize any potential job losses during these actions,” said Diavik President and Chief Operating Officer, Kim Truter.

Diavik owners Harry Winston and Rio Tinto said that Diavik's long term-future is in underground mining. Both companies added that they remain committed to the underground mine.

Kinross Gold, the new partner in Diavik, did not comment publicly on the actions.