Rio Tinto offers early termination to Diavik employees to save costs

Diavik diamond mine

Rio Tinto is offering early termination for employees at its Diavik diamond mine as part of the company’s efforts to save costs ahead of the mine’s closure in 2026, the Australian miner told jewelry news agency Rapaport.

Located in Canada’s Northwest Territories, about 200 km south of the Arctic Circle, Diavik has become an integral part of the NWT economy, employing over 1,000 people and producing an average of 6-7 million carats of gem-quality diamonds annually.

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Since entering production in 2003, the mine has outputted roughly 90 million carats of rough diamonds, making it one of the largest in Canada.

The offer of early termination to Diavik employees, says Rio Tinto, is a response to the challenges currently facing the diamond industry as the mine approaches the end of its life cycle.

“I can confirm that Diavik is looking at voluntary separation as part of our efforts to manage costs and rightsize our business given the relatively short runway to Diavik’s planned closure,” Matthew Breen, chief operating officer at Diavik, told Rapaport.

While the diamond mine is slated to close in the first quarter of 2026, Rio previously indicated that some workers will remain at the mine site until 2029 to support the closure and reclamation process.

Elsewhere in NWT, De Beers’ Gahcho Kué mine, about 280 km away from Yellowknife, is expected to follow Diavik and close around 2030.

A report earlier this year shared by research firm Impact Economics estimates that these NWT diamond mine closures could result in 1,500 jobs being lost and about 1,100 residents leaving the territory.

Source: mining.com

Strong Demand Sends Ekati Rough Sales Surging

Revenue from the Ekati deposit’s rough production soared during the fourth quarter as demand for its goods strengthened, according to owner Burgundy Diamond Mines.

Sales from the Canadian mine rose 37% year on year to $166 million for the three months that ended December 31, Burgundy reported last week. Sales volume jumped 41% to 1.8 million carats, from 1.3 million carats a year before, outweighing a 2% drop in the average price to $93 per carat.

Output increased 19% to 1.2 million carats for the October-to-December period. During the quarter, Burgundy held four auctions, including one for special stones. The miner sold all of its available inventory during those auctions, it noted.

“Each of our four auctions during the December quarter were oversubscribed due to significant customer demand,” said Burgundy CEO Kim Truter. “This has put us in a strong position with a healthy cash balance to fund the upcoming winter-road resupply and to commence the important work activities to extend the mine life at Ekati.”

Burgundy is currently retrieving ore from two sites at Ekati: an open-pit operation at Sable and an underground one at Misery. It is also working on extending Sable underground and is optimizing the Point Lake area.

Burgundy purchased Ekati from Arctic Canadian Diamond Company for $136 million in March.

Source: Diamonds.net

Rough Sales for Ekati Mine Rise Despite Market Slowdown

Revenue from the Ekati mine’s rough output climbed 11% during the third quarter, according to owner Burgundy Diamond Mines.

The company sold 784,000 carats of rough from the Canadian deposit for $90 million in total between July 1 and September 13 up from 901,000 carats for $81 million a year earlier. Burgundy reported these figures last month as sales-to-date for the quarter, which ended September 30.

“The sales results…demonstrate the differentiated value of Burgundy diamonds and our transparent and credible sales channels, despite a softer-than-usual market,” said Burgundy CEO Kim Truter.

Burgundy purchased Ekati from Arctic Canadian Diamond Company for $136 million in March. At the same time, it chose not to pursue its options at the Ellendale mine in Australia, of which it had considered taking ownership.

Burgundy had approximately $139 million in rough inventory at the end of August, in addition to its ongoing diamond production, it noted in the September statement.

The company’s shares rose 16% on the Australian Stock Exchange (ASX) following the announcement.

Source: Diamonds.net

Significant Potential at Ekati, say New Owners

Vivid yellow rough diamond
Vivid yellow rough diamond

Burgundy’s $136m deal to buy the Ekati diamond mine, in Canada, is likely to extend its life “significantly”, says Kim Truter, the company’s CEO.

The purchase, announced last week, from Arctic Canadian, should be concluded next month, pending financing and shareholders’ approval.

“The real advantage is it’s a tier-one asset in a tier-one country,” Truter told CBC News, Canada’s publicly owned news and information service.

He said he saw untapped potential at Ekati, which opened in 1998 as Canada’s first diamond mine.

Ekati is particularly attractive to Australia-base Burgundy because of the fancy yellow stones it produces, such as the 71.26-carat octahedron diamond recovered last September (pictured), believed to be the largest fancy vivid yellow gemstone discovered in Canada.

New owner Burgundy has a keen interest in yellow diamonds. It is currently reviving the Ellendale mine, Western Australia, once the world’s largest producer of fancy yellow diamonds, and has established its own dedicated cut and polish facility in Perth, also in Western Australia.

Burgundy is buying Ekati from Arctic Canadian Diamond Company, which acquired it in February 2021 after the previous owners, Dominion Diamonds, filed for insolvency.

Source: IDEX Online

Dominion Diamond Mines sale of Ekati falls through

Ekati and Diavik diamond mines

The future of the Ekati diamond mine in Canada’s Northwest Territories remains uncertain after Dominion Diamond Mines announced that a deal to sell it to a subsidiary owned by its parent company, The Washington Companies, has fallen apart.

Dominion Diamond reported on Oct. 9 that three insurance companies – Aviva Insurance Company of Canada, Argonaut Insurance and Zurich Insurance – had reached “an impasse” in negotiation with the purchaser, and stated “there is no reasonable prospect of reaching a satisfactory agreement among them.”

Dominion Diamond, which was purchased by The Washington Companies in November 2017 for $1.2 billion, was granted creditor protection in April. Mining was suspended and the Ekati mine placed on care and maintenance in March due to the coronavirus.

Altogether, the three insurance companies have issued about C$280 million in surety bonds to the government of the Northwest Territories that were intended to guarantee that the diamond mine could be closed safely and reclaimed once the mine closes permanently.

The sale was subject to a condition that the insurance companies and the purchaser reached an agreement on the treatment of the existing surety bonds.

Dominion remains in creditor protection until November 7, 2020, unless extended, it said, and is working with its advisors on next steps.

“The company will be assessing all strategic alternatives to return the Ekati diamond mine to full operations for the benefit of its employees, the Northwest Territories and other stakeholders,” Dominion Diamond stated in its news release.

The company has also confirmed that Pat Merrin, the company’s interim CEO since February, has relinquished that role. “In light of this development, Pat has advised that it would be appropriate that he step down as Interim CEO,” a company spokesman wrote in an email to The Northern Miner.

“Kristal Kaye, CFO and Mike Welch, COO will lead Dominion through this challenging period with strong support from the rest of the management team and our independent Chairman Brendan Bell.”

Dominion Diamond Mines is one of the world’s largest producers and suppliers of premium rough diamonds. The company owns a controlling interest in the Ekati diamond mine, which it operates, and 40% of the Diavik diamond mine. It also holds a controlling interest in the Lac de Gras diamond project. All of its assets are in the Northwest Territories.

Source: Northern Miner