Canada's mild winter disrupts key ice route to remote Arctic diamond mines By Reuters

By Divya Rajagopal

TORONTO (Reuters) – An unusually warm winter in Canada this year has delayed the opening of a 400-kilometer (250-mile) ice road that is rebuilt each year as a main pipeline for Rio Tinto (NYSE:), Burgundy Mines and De Beers access its diamond mines in the remote Arctic region.

The Winter Road, which serves the region only accessible by air for 10 months of the year, opened with a two-week delay in mid-February, disrupting the movement of goods along the Winter Road. ice built on 64 frozen lakes.

Earlier this week, the Tlicho government in the Northwest Territories (NWT) restricted the movement of commercial trucks for a few days on one of the winter highways due to warmer weather forecast across the Northern Slave Region.

While diamond production is not affected, the delay underscores the challenges companies face as the mines that make Canada the world's third-largest diamond producer reach the end of their productive lives.

It also highlights the infrastructure hurdle for the Northwest Territories and Nunavut, which are being positioned as the next frontiers in the exploration of critical metals, such as rare earths, cobalt and lithium, as they transition to a greener future.

Delays in construction of Winter Road, which first came into operation in 1982, have occurred in the past, but this year's is the longest delay in recent years, according to Tom Hoefer, senior adviser for NWT and the Nunavut Chamber of Mines.

“That's why we started the journey a little later,” he said.

Climate change, driven by the burning of fossil fuels, along with the emergence of the natural El Niño weather pattern, brought the world into record heat territory in 2023.

The impact of El Niño this year caused Yellowknife, the capital of the Northwest Territories, to record a high temperature of zero degrees Celsius (32 degrees Fahrenheit) in December and minus 8.7 degrees Celsius (17.6 F) in February, which makes them the warmest days of winter. in a decade, according to data from Environment Canada.

Winter Road opens between late January and early April and requires a minimum of 29 inches (74 cm) of ice for vehicles that can carry 26,000 kilograms (57,320 pounds) gross vehicle weight, to transport the diesel and dynamite needed to operate the mines.

On warmer days, engineers have found ways to trick nature by creating artificial ice by using giant sprinklers to spray water high into the air so that it cools and forms a thick layer of ice when it falls.

Paul Gruner, chief executive of the indigenous corporation Tlicho Investment Corp & Group of Companies, said that this year the warm winter begins and if there is a warmer end of the season or beginning of spring, it could be at risk of an early closure.

“So when you're nibbling on both sides of that, you start to create a very short season,” Gruner said.

Winter Road is jointly operated by Anglo American Group's Burgundy Diamond Mines group, Rio Tinto and De Beers (JO:), which manages the Ekati, Diavik and Gahcho Kue diamond mines respectively.

De Beers and Burgundy Diamonds said operations at their mines have not been affected by the mild winter. Rio Tinto declined to comment.

The Winter Road operation costs C$25 million ($18.54 million) for two months, an amount shared by the three companies based on the goods transported on the road and the distance traveled.

However, mines have an operational life of about 20 years and when they reach the end of their useful life they need to be closed.

Rio Tinto has said it will close the Diavik mine in 2026 and De Beers plans to close Snap Lake later this year, as it seeks to extend the life of Gahcho Kue.

CHICKEN AND EGG

Canada's remote Arctic region, home to about 86,000 people, faces complete closure of all diamond mines by 2030 and is looking for ways to keep mining alive.

Lack of infrastructure is a challenge and shorter seasonal use of the ice road could harm investments needed to extract critical minerals.

“If you are in the exploration phase… and considering using winter roading as part of your core business model, the risks start to appear… in your decision making about whether or not to move forward with a project,” he said. Tlicho Investment. Gruner said.

Hoefer of NWT and the Nunavut Chamber of Mines said the two Northern territories, which are as large as Europe, have the largest infrastructure deficits in Canada, one reason for the sky-high costs of living and doing business in the North.

“It's a chicken and egg situation, mining companies probably won't come unless there is some infrastructure, it's just too expensive,” said Heather Exner-Pirot, director of Macdonald-Laurier's Energy, Natural Resources and Environment program. . Institute.

It costs C$3 million per kilometer to build gravel roads, Pirot said.

Mining groups are pushing that a mega infrastructure project connecting NWT to Nunavut and running through diamond mines could help unlock the region's mineral riches. At least 23 of the 31 critical minerals listed by the Canadian government are located in the Northwest Territories.

“When the project comes up, it will replace roads that have served mining for 40 years, but until that happens, ice roads are necessary,” Hoefer said.

($1 = 1.3483 Canadian dollars)