An enlargement challenge has been placed on maintain at a diamond mine within the Far North, a transfer the Northwest Territories authorities says underscores the necessity to scale back its financial reliance on that trade.
Mountain Province Diamonds Inc. says it and joint-venture associate De Beers Canada Inc. have determined to pause the Tuzo Section 3 challenge on the Gahcho Kue mine some 300 kilometres northeast of Yellowknife.
Mountain Province owns 49 per cent of the mine and De Beers owns 51 per cent.
“This resolution follows a cautious evaluation of the challenge’s economics contemplating the prevailing market surroundings,” Mountain Province stated in a information launch late Monday.
“Whereas the Tuzo Section 3 challenge has demonstrated sturdy potential, present market circumstances have prompted the companions to take a measured strategy to its growth.”
A employee stands inside a scrubber on this handout picture on the Gahcho Kue diamond mine within the Northwest Territories, in March of 2018.
Mountain Province Diamonds
The rising recognition of lab-grown diamonds has brought on costs for uncooked diamonds to plummet lately.
U.S. tariffs on India, the place most uncooked diamonds are lower and polished, has additionally been a headwind for miners.
“That is severe information for the Northwest Territories,” N.W.T. Business Minister Caitlin Cleveland stated in a information launch.
“Gahcho Kué is a vital employer and financial driver, and any resolution that shortens the mine’s working timeline creates actual concern for employees, households, northern companies, and communities linked to this operation.”
The near-term impacts are anticipated to be restricted, however Cleveland stated the information reinforces a harsh actuality the territory should deal with: “Our financial base stays too depending on a single commodity.”
The Gahcho Kue mine, situated about about 280 kilometres northeast of Yellowknife within the Northwest Territories, is proven in an undated handout picture.
Credit score: De Beers Group of Firms
It’s been estimated that the diamond trade accounts for about one-fifth of the N.W.T.’s gross home product.
“The diamond trade has carried the N.W.T. economic system for many years, however the prolonged, profound decline in pure diamond costs underlines the necessity to diversify our useful resource economic system,” Cleveland stated.
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“We’d like extra initiatives, in additional areas, throughout extra commodities in order that employees and communities aren’t uncovered to the boom-and-bust cycles of anybody sector.”
Territorial leaders have been setting their sights on important minerals as a possible longer-term financial driver.
That may imply extra, however smaller, mines than the diamond trio that has lengthy anchored the territorial economic system.
Gahcho Kué, one among three diamond mines working within the territory, had been slated to run till 2031. Mountain Province didn’t present a revised closure date in Monday’s launch.
Rio Tinto’s Diavik mine is slated to shut down subsequent month, having reached the tip of its productive life.
The Ekati mine, owned by Australia-based Burgundy Diamond Mines Ltd., has a plan that might see it function so long as 2040, but it surely’s been beneath monetary pressure.
It requested the Australian Inventory Alternate in September to droop its inventory buying and selling till it might probably safe new funding and it undertook main workers cuts final 12 months.
Late final 12 months, Ottawa prolonged a $115-million Massive Enterprise Tariff Mortgage to a Burgundy subsidiary so Ekati can proceed working.
The change in Gahcho Kué plans follows information of one other pullback within the territory’s useful resource sector.
Imperial Oil Ltd. stated late final month that it plans to wind down its Norman Wells oilfield later in 2026, years earlier than deliberate. Premier R.J. Simpson stated it was “troublesome” however “not fully sudden.”
Lac de Gras surrounds the Diavik mine pit about 300 km northeast of Yellowknife, N.W.T. on July 19, 2003.
Adrian Wyld/ The Canadian Press
In an financial outlook launched final week with its newest funds, the N.W.T. authorities stated actual gross home product is predicted to fall 3.2 per cent in 2026 to $4 billion, constructing on declines within the earlier two years.
It stated the expected GDP drop is principally attributable to a 5.8 per cent lower in funding and a 4.9 per cent lower in exports attributable to decrease diamond mine manufacturing and the tip to grease manufacturing at Norman Wells.
In her funds handle to the legislature, Finance Minister Caroline Wawzonek stated the territory has lengthy struggled with a “lack of foundational infrastructure that contributes to excessive prices and holds again environment friendly building” of housing and different requirements.
“Sporadic growth incentivizes protectionism as we every maintain tight to the few large alternatives that come alongside,” Wawzonek stated in her speech.
“That is inefficient, stifles innovation and retains our collective alternatives from rising.
“This needn’t be our future.”
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