A green light to develop the Gahcho Kue diamond project in Canada's Northwest Territories into a full-scale diamond mine could mitigate the economic effects when the region's operational diamond mines reach the end of their production life, some officials are saying.

CTV Montreal quoted Tom Hoefer of the N.W.T and Nunavut Chamber of Mines saying that the region's Ekati and Diavik diamond mines (owned by BHP Billiton and Rio Tinto, respectively) are starting to "mature." While the mines will continue operating for a number of years, Hoefer said, production will start to decline.

In the past decade, diamond mining has come to comprise nearly half of the Northwest Territories' Gross Domestic Product (GDP), says Deb Archibald of the NWT Industry Ministry.

De Beers, which owns the Gahcho Kue project jointly with Mountain Province Diamonds, assesses that a mine at the site would create about 700 jobs while under construction and some 360 jobs for its 11-year lifespan. The final feasibility study for the Gahcho Kue project said that the mine could yield a total of 49 million carats of rough diamonds, with an annual diamond production of 4.45 million carats with an average per-carat price of $102.48.

However, moving ahead with a diamond mine at Gahcho Kue would carry an environmental price, since construction would affect the natural habitat of a number of caribou herds, whose numbers are already declining, and would drain the Kennady Lake.

The Gahcho Kue partners submitted an environmental impact study at the end of December 2010 that is currently under review.