Burgundy Diamond Mines (ASX: BDM), has halted open pit operations at Point Lake within its Ekati diamond mine in the Northwest Territories, resulting in hundreds of layoffs of workers and contractors.
The company, which went on a trading halt on Wednesday, cited poor market conditions as the reason for halting operations.
“Burgundy Diamond Mines made the decision to temporarily suspend open pit mining at Point Lake, which constitutes a shift from surface mining operations in the short term,” Communications Manager Ariella Calin said in a statement provided to The Northern Miner. “Unfortunately, this has necessitated the layoff of some employees and contractors for the project. With global diamond prices at record lows, at this time the Point Lake project is proving to be sub-economic.”
The site will continued to be maintained to allow for a rapid restart should market conditions improve, Calin said.
The suspension comes as all three active diamond mines in N.W.T. face eventual shutdowns. Rio Tinto’s (ASX, LSE, NYSE: RIO) Diavik mine is scheduled to close in 2026, while De Beers’ Gahcho Kué mine is expected to operate until 2030. Ekati’s long-term future remains uncertain. The mines are located hundreds of kilometres northeast of Yellowknife and are accessible only by air or seasonal winter roads.
Ekati has a workforce of 1,242, of which 28% were Northerners, with Northern Indigenous representing 60% of the Northern workforce, according to Burgundy’s 2024 Socio-Economic Agreement Report.
In response to an inquiry from The Northern Miner, Calin said “several hundred” workers and contractors have been laid off.
Misery operations ongoing
Operations will continue at Ekati’s Misery underground mine, located roughly 2 km from Point Lake.
Burgundy acquired Ekati in March 2023 through its $136-million purchase of Arctic Canadian Diamond.
Since then, it has grappled with mounting financial pressure amid a downturn in the global diamond market. Earlier this year, Burgundy said it would focus on achieving “financial flexibility” in 2025, including steps to ensure adequate working capital.
Company, industry changes
The company has also undergone significant leadership changes, including the retirement of CEO Kim Truter in May. He was succeeded by Jeremy King.
Ekati reached a major milestone in 2024, surpassing 100 million carats produced and sold over its 26-year history.
Still, the trading halt comes at a critical time for the region’s diamond industry. A recent report by research firm Impact Economics warns that mine closures could cost the territory 1,500 jobs and prompt more than 1,100 residents to leave.
Burgundy is to continue its trading halt until the publication of an official update on the matter.
- with files from Blair McBride
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