Canada’s three biggest diamond mines could be forced to close early, an economist has warned, amid the ongoing slump in prices.
Operators reported losses last year for Diavik, Ekati and Gahcho Kue, all in Canada’s Northwest Territories (NWT).
They are slated for closure as they reach the end of their lives – estimated at 2026, 2029 and 2030 respectively – but dwindling demand may render them uneconomic before those dates.
Graeme Clinton, an economist in Yellowknife, capital of NWT, told CBC, Canada’s national broadcaster : “I don’t think nearly enough is made of the state of the markets which are most important to our economy. These low prices could very well mean an early closure.”
He qualified his comments by saying that none of the miners had so far indicated that they’d bring forward their closing dates.
Diamond mining is key to NWT’s economy, representing over a quarter of its GDP, but miners have been hit hard by the downturn.
Rio Tinto’s Diavik mine lost CAD 127m (USD 94.6m) in 2024, Burgundy’s Ekati lost CAD 94.7m (USD 70.5m) and Mountain Province, minority-owner of Gahcho Kue lost CAD 81m (USD 60.0m).
Early closures would cost thousands of jobs, and would dent NWT’s economy.
Stornoway Diamond Corp. of Montreal has been granted protection under the Companies’ Creditors Arrangement Act from the Superior Court of Quebec while the company restructures its business and financial affairs.
Protection is extended to subsidiaries Stornoway Diamonds Canada, Ashton Mining of Canada, and FCDC Sales and Marketing.
Stornoway has signed a letter of intent with creditors Osisko Gold Royalties and Diaquem, a wholly owned subsidiary of Ressources Quebec, concerning a bridge financing agreement entered into in June this year. The LOI confirms that the creditors intend to acquire all of the assets and properties of Stornoway and assume the debts and liabilities owed them as creditors. Stornoway will continue to be the operator of the mine 320 km north of Chibougamau in the James Bay region.
Osisko says that under the terms of the bridge loan, It will retain its 9.6% diamond stream on the Renard mine and continue to receive diamond deliveries. The proceeds of any diamond sales will be reinvested in the mine for a period of one year.
Osisko and certain of the secured creditors have also agreed to supply an initial C$20 million of working capital to Stornoway. The working capital is intended to keep the mine operating without interruption.
