N.W.T. diamond mine scales back operations

The Diavik diamond mine in the N.W.T. will stop production for two six-week periods, defer the start of underground mine production and speed job cuts to cope with the challenging global market, its owners said Monday.

The summer shutdown is scheduled for July 14 to Aug. 24, while the winter shutdown is scheduled for Dec. 1 to Jan. 11, 2010, Diavik Diamond Mines said in a news release.

In addition, the underground mine will be placed on care and maintenance by the third quarter, once the majority of its construction is complete, said the company, a joint venture between a wholly-owned subsidiary of London-based Rio Tinto and Harry Winston Diamonds.

Earlier this month, Kinross, one of Canada's largest gold producers, said it would invest $150 million US in Harry Winston in exchange for an indirect piece of the Diavik diamond mine and a 20 per cent stake in Harry Winston.

Harry Winston, the former Aber Diamond Corp., said the cash infusion will help it pay down debt.

"Our announcements today will preserve the quality of our assets, and position us for the future," said Diavik president and chief operating officer Kim Truter in the release.

"Throughout these changes Diavik will continue its commitment to the North and to the health and safety of our workers and the protection of the environment."

The company is optimistic the economy will pick up, it said, adding its future is in the new underground operation.

The Diavik mine went into production in 2003. It is one of three diamond mines in the N.W.T. and employs about 750 people.

With files from the Canadian Press