Diamond downturn? N.W.T. mines bleed millions as early closures loom

by sarah_bauder | April 17, 2025 2:14 pm

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According to a report by Luke Carroll for CBC News, all three diamond mines in the Northwest Territories reported significant financial losses in 2024 due to inflation and declining diamond prices. Experts warn that closures may occur sooner than the anticipated five years, leaving the territory without a clear economic alternative.

Mining corporation Rio Tinto’s Diavik mine recorded a loss of C$127 million, while Burgundy Diamond Mines reported a C$94.7 million loss at its Ekati mine. Mountain Province, which co-owns the Gahcho Kué mine, reported a C$81 million loss.

Economist Graeme Clinton, who authored Eyes Wide Open: Understanding the Effects of a Diminished Resource Economy in the NWT, published last winter, shared his concerns with CBC News about the current market state. “These low prices could very well mean an early closure,” Clinton stated. He noted the absence of official indications regarding early closures but urged the public to recognize the risks, including the potential loss of more than 1,000 jobs.

Heather Exner-Pirot, a senior fellow at the Macdonald-Laurier Institute in Ottawa, expressed that pricing uncertainty is causing anxiety among mine workers, including her husband, who works at Gahcho Kué. She highlighted that low diamond prices will reduce the territory’s royalty revenues, even if the mines continue to operate as planned.

Mine operators have scheduled closures over the next several years: Diavik will close in early 2026, Ekati is set to close by 2029, and Gahcho Kué is projected to close around 2030. CBC News reported that Rio Tinto explained Diavik’s losses partly resulted from the end of surface mining at the A21 pit in 2023, a plane crash in Fort Smith, and adverse weather conditions.

Matthew Breen, Diavik’s chief operating officer, stated to CBC News that the company actively manages costs to maintain safe and profitable operations. Ariella Calin, a spokesperson for Burgundy, remarked that 2024 posed “extremely challenging” conditions due to record-low diamond prices and ongoing high operating costs. She noted that the wind-down of the Sable pit and preparations for the Point Lake pit also impacted Ekati’s output. However, she remains optimistic about extending Ekati’s life into the mid-2030s. CBC News reached out to Mountain Province and De Beers, the majority owner of Gahcho Kué, but the companies did not respond in time for the report.

Diamond analyst Paul Zimnisky pointed out that lab-grown diamonds account for over 20 percent of the global market. He also noted a substantial drop in demand from China, which decreased by as much as 50 per cent since before the COVID-19 pandemic, cautioning that inflation and trade tariffs could pose further challenges to the sector. However, he indicated that recent signs of improved consumer spending in the U.S. provide some hope.

Diamond mining plays a crucial role in the N.W.T. economy, accounting for over a quarter of its gross domestic product (GDP).

All information in this article is sourced from CBC News.[2]

Source URL: https://www.jewellerybusiness.com/news/n-w-t-mines-closures/

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