In Canada, nothing works anymore, even the Diamond Mines are failing.
NWT commits millions to help prop up its diamond mines
Ollie Williams·April 22, 2025
The NWT is redirecting millions of dollars – including cash earmarked for emissions reduction projects – to help its three diamond mines, which are struggling.In a Tuesday news release, the territorial government said “targeted relief measures” were needed because of “growing financial pressures and industry-wide uncertainty.”
All three operating mines northeast of Yellowknife – Diavik, Ekati and Gahcho Kué – have seen their owners report significant losses in the past year, driven in part by suppressed diamond prices as the market for lab-grown diamonds increases.
Global trade uncertainty brought on by the United States’ approach to tariffs is another factor.
The GNWT says it will give the three mines a collective $11.2 million in property tax relief and spend up to $416,000 speeding up diamond valuation, which is carried out by territorial staff. Doing so will help diamonds get to market faster, the territory said.
A fund into which diamond mines paid carbon tax between 2019 and 2023 will also be emptied out and returned to the mines without any restrictions “to support ongoing operational costs.”
The fund was part of the NWT’s “made in the North” carbon tax. It existed so that diamond mines could pay tax into it but then withdraw cash later to help fund projects that reduced their emissions. The Diavik mine, for example, used $3.3 million from the fund to help pay for a large solar project.
The GNWT says returning the fund to the mines will give Ekati an extra $1.7 million and Gahcho Kué another $2.1 million. (The way the territory’s mines pay carbon tax changed in 2023. Tuesday’s announcement doesn’t change that newer mechanism.)
“These measures respond directly to urgent economic concerns raised by industry leaders and Indigenous development corporations,” the territorial government stated.
Indigenous development corporations hold various mining-related contracts that help funnel money to communities. Overall, the diamond sector is reported to employ more than 1,000 northerners and contribute approximately 20 percent of the NWT’s GDP.
“Without action, there is a clear risk of disruption to northern jobs, contracting opportunities, and the economic stability of communities that rely on the sector,” Tuesday’s news release read.
“All GNWT supports are time-limited and come with clear expectations around transparency and accountability. Reporting mechanisms will ensure that the benefits flow to NWT-based labour, contractors, and Indigenous business partners.”
The three mine operators – Rio Tinto, De Beers and Burgundy – have been approached for comment.
“This is about protecting our economy from sudden shock,” said territorial finance minister Caroline Wawzonek in a statement.
“The diamond sector has been central to the Northwest Territories’ economy for decades, and we have a responsibility to act when the stakes are this high.
“These targeted, short-term supports are not about corporate profits – they’re about maintaining stability for the workers, families, communities, and Indigenous governments that rely on this sector.”
Industry minister Caitlin Cleveland said the measures were designed to “ensure that Indigenous businesses and governments don’t lose decades of progress overnight.”
“It’s about preventing disruption and creating the space to plan for what comes next – together,” she was quoted as saying.
The role diamonds currently playCalls for the NWT to plan for a future beyond diamonds have been happening for years. In 2024, Yellowknife economist Graeme Clinton said he was “not sure if people get it” when asked about the drop in revenue and employment the territory is expected to face.
Diavik is set to close in early 2026. Ekati and Gahcho Kué have each expressed an ambition to remain in operation past 2030, but those projections come from times that weren’t as economically challenging as the current conditions. More recently, Ekati owner Burgundy had threatened it would go elsewhere if the mine did not receive more help from government.
Last year, Burgundy reported a net loss of US $94.7 million (CA $131 million at current exchange rates). Rio Tinto’s diamond division – predominantly Diavik – reported a loss of US $127 million (CA $176 million).
While De Beers reported a modest profit of about US $11 million (CA $15 million) from its Canadian operations, Mountain Province Diamonds – which owns just under half of the Gahcho Kué mine, with De Beers the majority owner and operator – reported a net loss of CA $81 million.
“There’s nothing in the next six years that is going to replace 3,000 jobs at those three mines. There’s nothing,” Clinton said when releasing a paper on the subject a year ago.
“We are at a bit of a starting-over phase and this is really where anybody who considers themselves a leader needs to understand where we are with the economy and where we want to go, and recognize that these things are happening. We ought to understand the implications and then devise a way forward.”
Rio Tinto just released its annual Diavik socio-economic report.
In 2024, that report states, the mine spent $285 million in the North and offered the equivalent of 1,272 full-time positions, with 34 percent of its workforce being northern (a little under half of those northern workers were Indigenous).
Last week, three Indigenous development corporations who work closely with the mines issued a press release of their own, celebrating what they called “award-winning business capacity, including capital and skilled labour, [built] through contracts with NWT diamond mines.”
The three – Det’on Cho, the Tlicho Investment Corporation and Metcor – said they had hired economist Clinton to analyze the diamond sector’s benefit to the Tlicho Government, Yellowknives Dene First Nation and North Slave Métis Alliance.
According to the press release, that worked out at 335 Indigenous jobs, annual income worth $39.6 million for local Indigenous workers, and $104 million in annual revenue to the three Indigenous development corporations.
Already, though, that press release showed the corporations looking ahead to their next major opportunity if diamond mining drops off the territory’s economic radar.
“We recognize immense opportunities to preserve and build upon this foundation and retain skilled northerners in the North to work on the much-needed infrastructure that will create opportunities for the region, fortify Arctic sovereignty, and improve the lives of northerners,” the corporations jointly stated, referring to planned massive infrastructure projects and defence spending commitments.
Where next for the NWT economy?The NWT is not entirely bereft of new mines.
Projects like Pine Point, Nico, Nechalacho and Prairie Creek are all at least some way down the line toward becoming operational. They are critical minerals projects that may stand to benefit if those minerals become harder to access from China as the Trump administration’s tariff war is sustained.
However, none of those mines are currently expected to reach the scale of the diamond mines in terms of employment or overall economic impact.
“New mines are on the horizon, but most are still a few years away,” industry minister Cleveland was quoted as saying on Tuesday. She said the supports being announced for the diamond sector were intended to “help bridge that gap.”
When gold began to drop off in the 1990s, Yellowknife residents spent a few years worrying where the money and work would come from before diamonds appeared on the horizon.
Now, a similar unease is emerging. The territory has no obvious ready-to-go replacement for diamonds and no fresh diamond project ready to replace Diavik, Ekati or Gahcho Kué.
The generally accepted wisdom is that without a new diamond mine on the books, the NWT will have to look to a raft of smaller mining projects – or diversifying toward tourism and other sectors at exceptional pace and scale – to sustain its economy in the next couple of decades. (A $375-million conservation deal secured through public and private finance last year marked one example of this happening.)
That said, not everyone considers the next few years to mark a definitive end to the territory’s diamond era.
Geologist Casey Hetman presented on the subject of future diamond exploration at a conference in Yellowknife last year.
Speaking with Cabin Radio at the time, Hetman – whose career began in the NWT some 35 years ago – said he still sees a path for more diamond mines to emerge.
“A lot of that production is winding down. OK, that’s part of the industry. Now, we need to go and revisit a lot of the kimberlites that we found,” he said, referring to the underground diamond-bearing structures that occur in some areas of the territory.
“We’re not done with diamonds … We need definitely more data, but it’s fully justified to go back. There are examples where people have gone back, did a little bit more work and were successful, and I think we need to continue that process.” |
