Regulations could delay Victor diamond development.

De Beers' James Bay diamond project sits in limbo while the diamond giant waits to cross a major regulatory hurdle in its quest to develop the first diamond mine in Ontario.

Natural Resources Canada and the Canadian Environmental Assessment Agency have decided to extend the period of time for public review from 60 to 90 days. The company is "still assessing" the impact that will have on any future mine development, says Linda Dorrington, a De Beers spokesperson.

The extension could mean De Beers will not be able to mobilize in time to use the 2005 winter road to begin preparing the site for construction, "which means the project is delayed by a further year" into 2006.

After filing Environmental Assessment (EA) documentation with the federal government in March, the diamond producer held two rounds of public consultations with First Nations communities on the west coast of James Bay.

In mid June, De Beers was in the midst of a five-week break to review documentation and hear concerns from the First Nation communities and federal regulators about its proposal to build an $820-million diamond mine west of the village of Attawapiskat on James Bay.

Among the First Nations' concerns is the transportation of fuel to the Victor site by tanker and barge into James Bay, and then to the mine site via a 90-kilometre underground pipeline.

The Attawapiskat First Nation has also asked provincial Energy Minister Dwight Duncan to revisit the option of providing power to the site by means of hydro, rather than on-site diesel generation.

De Beers is considering alternate access to the Victor site by driving a road north from Constance Lake, near Hearst, to the mine 100 kilometres away, rather than using a James Bay coastal road.

The Victor project's feasibility study was completed at the end of 2003, but De Beers' board of directors will not green-light the project until the EA is approved, an Impact Benefit Agreement (IBA) is signed with the Attawapiskat First Nation and a winter road agreement is reached.

"When we have the IBA signed, the winter road agreement signed and the Environmental Assessment approval, then we will go the board of directors and say we need $820 million to build the mine," says Dorrington.

De Beers has to apply for 11 federal and 30 provincial permits. Once the approvals are given, there should be many opportunities for northern companies during the three-year construction project, expected to employ as many as 600 people at the site during the peak construction period.

Last spring, De Beers held information sessions across the North, introducing itself to northeastern Ontario business communities and inviting companies to submit information packages to be entered into a database of available suppliers. Dorrington says many subcontracting opportunities will exist for the private sector. Management of the Victor project will be carried out from a Timmins office.

By IAN ROSS 

Northern Ontario Business