Low diamond prices raises risk of early closure of N.W.T. mines, experts say

All of the N.W.T.'s diamond mines are reporting millions of dollars in losses from last year as they deal with inflation and slumping diamond prices. 

With just a short time left in the lifespan of the three mines and more potential economic turbulence ahead, experts believe there is risk the mines could close —  and leave the territory with no economic replacement plan — earlier than expected.

Rio Tinto reported its Diavik diamond mine experienced a $127 million loss in 2024, Burgundy reported that Ekati saw a $94.7 million loss, and Gahcho Kué's minority stake owner Mountain Province reported a $81 million loss.

Graeme Clinton is a Yellowknife economist and the owner of the firm Impact Economics. He also authored the Eyes Wide Open report published last winter, which painted a grim picture of the territory's economic future once the mines close. 

"I don't think nearly enough is made of the state of the markets which are most important to our economy," said Clinton. 

"These low prices could very well mean an early closure" at all three mines, he said. 

Clinton said there's no indication the mines will be closing early and he doesn't want to alarm people but he said the low prices are something the public should be aware of because closure could mean the loss of over 1,000 jobs, both directly and indirectly.

He said that remediation also won't offer nearly as much employment as the operating mines will. 

"It's not like Giant Mine where there's going to be a 25-year legacy," he said. 

Heather Exner-Pirot is a senior fellow and director of energy, natural resources and environment at the Macdonald-Laurier Institute in Ottawa. Her research focuses on the Arctic and natural resources.  

She said her husband works for Gahcho Kué, and that there's fear among workers about what the slumping prices mean. 

Exner-Pirot also said the price of diamonds is important, whether the mines close early or operate until their intended lifespan is over. That's because if diamond prices remain low, the territory will continue to get fewer royalty payments.

Diavik's closure is scheduled for the first quarter of 2026, Ekati is expected to operate until 2029 — although there's been some discussion on its lifespan extending — and Gahcho Kué is expected to operate until about 2030. 

Rio Tinto says part of the financial losses in 2024 were impacted by the tragic Fort Smith plane incident, the end of surface-level mining at the A21 pit in 2023, as well as weather and geotechnical issues.