De Beers Canada has halted operations at its unprofitable Snap Lake diamond mine located 220km north-east of Yellowknife in the Northwest Territories, Canada.
The mine has been placed on care and maintenance due to weak diamond prices.
De Beers had invested $1.8bn on construction and mine operation by the end of 2013. The company’s latest decision has made 434 employees redundant.
Snap Lake was planned to operate until 2028 but the mine operations was not profitable. In addition, it faced closure due to groundwater problems believed to have added to already high costs at the mine.
In order to determine the potential of the ore body as a viable mine, De Beers plans to assess market conditions in 2016.
Suspension at Snap Lake mine is expected to last between one to nine months. During this period, the company will employ 120 people for the suspension work.
Around 70 employees would be required to carry out ongoing care and maintenance operations.
De Beers will continue environmental monitoring and work required under the mine’s permits during the care and maintenance period.
Following the suspension, the company transferred 41 employees to its Gahcho Kué mine, which is expected to start production in late-2016. Another 60 would be shifted in 2016.
De Beers Canada chief executive Kim Truter said: "The men and women at Snap Lake have put enormous effort into this challenging ore body over many years, but even the gains made this year are not enough to overcome the market conditions and put us in a profitable position.
"To see such a strong commitment to the mine makes today’s announcement that much more difficult."
Image: De Beers’ Snap Lake mine is located 220km north-east of Yellowknife in the Northwest Territories. Photo: courtesy of De Beers UK Limited.