Dominion Nears Deal to Restart Ekati

Nov 15, 2020 5:59 AM By Rapaport News

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RAPAPORT... Dominion Diamond Mines plans to recall approximately 60 of its furloughed workers in December to prepare for a restart at its Ekati mine in Canada.

Operations at the deposit, which has been shut since March due to Covid-19, will restart after lenders told Dominion they were close to finalizing an agreement to restructure its debt and fund the company, the miner said Friday.

The news is the first positive sign that the company will get back on its feet. It filed for creditor protection in April amid mounting debt and the inability to sell its diamonds during the pandemic. Last month, a planned sale of the miner to affiliates of its owner, the Washington Companies, fell through after the prospective buyers failed to reach an arrangement with insurers to cover Ekati’s future costs. Shortly afterward, Dominion’s CEO stepped down, and the company considered layoffs.

Although the restructuring agreement is not yet finalized, Dominion has already recalled employees as it needs to begin preparations as soon as possible if it intends to operate in 2021. This will give the company time to procure the necessary items it needs delivered via the ice road — a 400-kilometer temporary passage into the frozen Northwest Territories where Ekati resides. The road, which is the only route for bringing in supplies, is open for a window of approximately two months early in the year due to the temperatures.

“In anticipation of the parties reaching such an agreement, Dominion has determined to recall these employees given necessary lead times required to mobilize the workforce while adequately complying with Covid-19 isolation protocols,” it said.

The court has also granted Dominion an extension on its creditor protection until December 15.

Image: The ice road to the Ekati mine. (Dominion Diamond Mines)

Tags: COVID-19, Dominion, Dominion Diamond Mines, ekati, Ekati mine, Rapaport News, The Washington Companies