Virus outbreak halts production at Dermot Desmond-backed diamond mine

An outbreak of Covid-19 among mine workers has halted production at Gahcho Kue, a Canadian diamond mine that is co-owned by the Dermot Desmond-backed Mountain Province Diamonds (MPD).

MPD, in which Mr Desmond owns a stake of almost one-third, told investors on Monday there were up to eight cases involved in the outbreak. Under local government guidelines, it is defined as an outbreak at the site because the infections were acquired inside the mine, and not outside in the community.

MPD’s share price fell up to 8 per cent immediately after its announcement, although the stock recovered most of its lost ground within a few hours.

“The management team is assessing the situation and working actively to contain the outbreak to ensure it does not spread further or into the community. All affected individuals and their close contacts have been quarantined,” MPD said.

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The company said it would provide an update on a resumption of production “when it is known”.

Gahcho Kue is 49 per cent owned by MPD, with the rest owned by South African diamonds giant De Beers, which also operates the mine. It is located inside the Canadian Arctic tundra in the Northwest Territories.

Drop in sales

The mine and MPD have been badly affected by the global virus pandemic. MPD recently announced full-year results that showed its diamond sales were down almost 18 per cent to $208.2 million (€172.6 million) in 2020. However, those figures included $100 million worth of diamonds that were bought by Mr Desmond as part of a deal to bolster the company’s finances.

The businessman, whose other interests include biometrics group Daon and Intuition Publishing, which produces learning software, has been an investor in the Canadian diamond market for more than 20 years. Jonathan Comerford, who works for Mr Desmond in Dublin, is MPD’s chairman, while his son Brett Desmond is a director of MPD.