Closure of Ekati Diamond Mine Marks a Shift in Northwest Territories Economy

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The Ekati Diamond Mine is set to close as Burgundy Diamond Mines Ltd. failed to secure a buyer, following the earlier closure of the Diavik mine. This development impacts the local economy and employment in the Northwest Territories.

YELLOWKNIFE — The Northwest Territories’ diamond mining landscape has dramatically changed with the impending closure of the Ekati Diamond Mine, operated by Australia-based Burgundy Diamond Mines Ltd. This closure comes after the company was unable to find a buyer for its Canadian subsidiary and depleted its funds necessary for continued operations. The Ekati mine, located approximately 300 kilometers northeast of Yellowknife, follows the earlier closure of the Diavik mine in March, which had reached the end of its operational lifespan. With these developments, the Gahcho Kué mine, jointly owned by De Beers and Mountain Province, remains the only diamond mine actively operating in the region, although it, too, is expected to cease operations in the coming years.
The three diamond mines, which included Ekati and Diavik, were integral to the economy of the Northwest Territories, contributing an estimated 20 percent to the territory’s gross domestic product. They also provided significant employment opportunities for local Indigenous communities. Robert Jenkins, deputy minister in the territory’s environment ministry, acknowledged the significance of the mine's closure on the local economy but also noted the potential for growth in other sectors such as resource development, infrastructure, and housing construction.
This announcement came shortly after the Supreme Court of British Columbia appointed a receiver for Burgundy’s Canadian arm, Arctic Canadian Diamond Company Ltd., placing it into receivership. This legal process allows a neutral third party to manage the distressed company’s affairs and ensure that creditor obligations are met. The court had previously granted the company protection from creditors in May, allowing it to explore options to stabilize operations at Ekati. However, Jenkins indicated that no viable solution was found that could sustain mining operations, leading to the conclusion that the company lacked the financial means to maintain the site.
Currently, representatives from PricewaterhouseCoopers (PwC), the court-appointed receiver, are on-site at the Ekati mine to oversee safety and environmental measures during the winding down process. Approximately 360 employees worked at the mine, and while some workforce will remain for care, maintenance, and reclamation efforts under the receiver's guidance, the exact number of retained jobs is still being determined. The receivership order allows PwC to implement workforce reductions, including layoffs.
Jeremy King, chief executive of Burgundy, expressed disappointment over the closure, describing it as a troubling outcome for the workforce, stakeholders, and communities in the Northwest Territories. He highlighted Ekati’s significant contributions over its 25 years of operation, particularly its role as a major employer and its relationships with Indigenous communities and local businesses.
The government of the Northwest Territories holds around $327 million in funds allocated for the proper closure and reclamation of the Ekati mine. Jenkins expressed confidence in the sufficiency of these funds for maintaining and reclaiming the site, though he acknowledged the mine's premature closure. Experts from PwC will assess whether the closure costs need to be recalibrated, with an aim to stay within the reclamation securities currently available.
The territory has an interim closure plan for the mine established in December 2022, but a final plan remains unprepared. Burgundy had previously outlined a potential operational timeline that could have extended Ekati’s life until 2040. Jenkins noted that while some groundwork has been laid through the interim plan, the absence of a final plan is unfortunate and underscores the need for discussions regarding future contingencies in similar situations.
The closure of diamond mines was anticipated, but the industry's decline has been hastened by the rising popularity of lab-grown diamonds and tariffs imposed in the U.S. As the Northwest Territories looks ahead, territorial leaders are exploring critical minerals as a potential economic driver, which could lead to the development of smaller, more numerous mines as replacements for the larger diamond mines that have historically dominated the region’s economy. Additionally, energy and road infrastructure projects in the territory are being expedited for approvals through the new federal major projects office.

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