The company overseeing Ekati Diamond Mine has sought creditor protection due to financial struggles caused by a sharp drop in diamond prices. The decline, exceeding 70% in a year, has jeopardized jobs, payments to Indigenous communities, and the mine’s long-term viability.
Arctic Canadian Diamond Company, operating Ekati in Northwest Territories and a Burgundy Diamond Mines subsidiary, filed for protection in British Columbia’s Supreme Court. The court granted temporary shielding until May 11, safeguarding assets from creditor actions.
Established in 1998, Ekati had 700 employees in 2024, with a significant portion being northern and Indigenous residents. However, the workforce decreased to around 340 by March 31. Last year, the mine achieved a milestone of extracting 100 million carats of diamonds.
To support ongoing operations and job security, the company received a $175-million loan from the federal government. Officials are closely monitoring the situation to advocate for workers and communities. However, concerns remain about the impact on workers and the region’s economic future.
The company’s financial distress, despite the federal loan, is highlighted in court documents. Debts amount to approximately $655 million, including future cleanup costs estimated at $428 million upon mine closure around 2040. The company has funds allocated for cleanup and received financial aid to sustain operations.
Global factors such as declining diamond prices, competition from lab-grown alternatives, reduced Chinese demand, and tariff effects were cited as reasons for the price collapse. Diamond sales plummeted from over $600 million in 2024 to about $253 million the following year, reflecting the challenging market conditions.