Dominion Diamond secures environmental approval for Ekati mine expansion

Canada’s Northwest Territories government has signed off on Dominion Diamond’s (TSX, NYSE:DDC) project to expand its Ekati mine, which could help keep the operation in production until 2033.

Lands minister Robert C. McLeod wrote to the Mackenzie Valley Environmental Impact Review board Thursday, saying the government accepted the board's 22 recommendations, which were outlined in February.

Construction of the Jay project is set to start in the second half of the year.

The Jay project consists on opening a new open pit on what is considered the most significant undeveloped deposit at Ekati, Dominion said in a statement. Without the expansion, Ekati will run out of its existing reserves by 2020.

The project also requires building a dyke in Lac du Sauvage, draining part of the lake, and building a new road, all which raised concerns about the effects of the expansion on the region’s caribou herds.

The company, however, has come up with a plan that includes a “road mitigation” scheme designed to reduce the risk caribou face from the mining operation.

Now that the project's environmental review, Dominion can apply for the permits to begin construction, with mining at the pit expected to begin in 2021.