Diavik in Jeopardy after the Collapse of Dominion Deal
October 26, 20
(IDEX Online) - The future of Canada's Diavik mine is in doubt after a deal to rescue Dominion, its troubled minority-owner, fell through.
Dominion stopped making payments to DDMI, the Rio Tinto subsidiary that operates the deposit, when it filed for insolvency protection in April. It currently owes over US$90m.
DDMI says it can't afford to make preparations for the harsh winter, just 220km from the Arctic Circle, and keep the mine going without money from Dominion, or from its parent company.
Dominion was on the brink of selling nearby Ekati, which it owns outright, to The Washington Companies, but the deal collapses earlier this month after a failure to reach agreement on $280m of surety bonds.
Dominion went to court in April, alleging DDMI had been mismanaging the mine - a charge that DDMI vehemently denies.
DDMI is now seeking the permission of a court in Alberta court to start selling off Dominion's share of the diamonds mined at Diavik (pictured), rather than handing them over to its joint venture partner.