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CBC
04-04-2025
- Business
- CBC
Low diamond prices raises risk of early closure of N.W.T. mines, experts say
Social Sharing 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. What are the mines saying? 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. "We are constantly reviewing and managing our costs and expenditures to ensure we run a safe and profitable operation," reads a statement from Matthew Breen, Diavik's chief operating officer. Ariella Calin, a spokesperson for Burgundy, wrote in an email that "2024 was extremely challenging for Ekati due to historic low rough diamond prices with no relief on costs." Calin wrote the mine was also impacted by production being lower due to the ramping down of the Sable open pit and preparing for the new Point Lake open pit. "Even though we are operating in one of the most expensive jurisdictions globally, we are optimistic about the future of Ekati well into the mid-2030s. We will continue to work with our local government, suppliers and communities to help build a sustainable future for the mine for other generations." CBC News reached out to Gahcho Kue's minority owner Mountain Province and majority owner DeBeers. Neither responded by deadline. Why are the prices so low? Paul Zimnisky, an independent diamond industry analyst, said the overall diamond market has been challenging for the entire supply chain over the last two years. Zimnisky said lab-grown diamonds only represented about one per cent of the market 10 years ago, but five years ago it grew to about 10 per cent and now — it's over 20 per cent. He said another factor impacting the low prices is that demand for diamonds from China — which was the second largest consumer of diamonds — has gone down by as much as 50 per cent from pre-pandemic levels. What does the future look like? Karen Costello, the executive director of the N.W.T. and Nunavut Chamber of Mines, said a big fear for the mines were the tariffs. Zimnisky said looking forward, the tariffs could complicate supply chains and inflation could impact consumer spending overall. But he said if the U.S. ends up benefiting in the medium-term, it could help with the global consumer diamond demand. "Overall, I would speculate that a lot of countries will cut or reduce their levies on the U.S. in the coming days and a lot of this will simmer down," he wrote in a follow-up email. Zimnisky said the markets have recently been showing some promising signs in consumer spending on diamonds, which could be good news for the territory's mines. But even with a bounce back in diamond prices some experts, like Exner-Pirot, say it doesn't change the territory's fortune as the mines heads toward closure date with no industry ready to replace them.
Yahoo
28-01-2025
- Business
- Yahoo
Burgundy Diamond Mines reports fourth quarter 2024 results
CALGARY, Alberta, Jan. 28, 2025 (GLOBE NEWSWIRE) -- Burgundy Diamond Mines Limited (ASX:BDM) (Burgundy or the Company) provided its financial and operating results for the fourth quarter (Q4-2024) ended December 31, 2024, to the Australian Stock Exchange on January 28, 2025. During the quarter, Burgundy unveiled the first ore from Point Lake open pit, marking Ekati's 10th operation over twenty-six years of production. Burgundy also remains on track to release its first mine plan by the end of Q1-2025. Burgundy will release the longer-term mine plan in the second half of 2025, which could extend the life of mine to the mid-2030s. Additionally, Burgundy completed the set-up of an environmental trust where contributions made for future closure obligations can be used as tax credits that can be applied to 2024 taxable income, carry back to tax period ended December 2023 or carry forward to future years. Fourth quarter operational and financial highlights:All currency unless otherwise noted, is presented in US dollars. Ore tonnes mined: 0.97 million tonnes, decreased by 12% from (Q4-2023: 1.10 million tonnes) Tonnes processed: 0.98 million tonnes, decreased by 7% from (Q4-2023: 1.05 million tonnes) Carats recovered: 1.02 million, decreased by 17% from (Q4-2023: 1.24 million) Carats recovered per tonne processed: 1.05 C/t, decreased by 11% from (Q4-2023: 1.18 C/t) Carats sold: 1.10 million over two sales events, down 39% from (Q4-2023: 1.79 million) $92/ct. achieved for total proceeds of $101 million (A$162 million) EBITDA: $20.5 million; (A$33.0 million) Cash of $25.1 million; (A$40.4 million) 'During the quarter, Burgundy's mining team unveiled the first ore from Point Lake open pit, marking Ekati's 10th operation over the twenty-six years. Burgundy looks forward to reporting on its progress next quarter, by which point the project will be entering ore production,' said Kim Truter, CEO of Burgundy Diamond Mines. 'This period is typically cash intensive for Canadian Arctic mines, due to a four-month period in which most consumables are purchased and then trucked to site along the winter road, which is the reason for Burgundy's lower cash position this quarter. Given the environmental trust account setup, and payments made during 2024, Burgundy now has a ~ US$27 million tax benefit heading into 2025, which significantly reduces, if not eliminates the Company's 2024 tax obligation.' 'The Company's strategy has remained the same, including leveraging an asset with exceptional infrastructure and remaining Mineral Resources in one of the great diamond fields. 2025 will be important for the organisation, as the results of Burgundy's mine life extension work come to fruition.' To view the full ASX Q4-2024 quarterly activities report, please visit: Note: All figures presented in this release are in US dollars and include performance results and metrics across all of Burgundy's operations, including Ekati Diamond Mine, the company's rough diamond sales office in Antwerp, Belgium and diamond cutting and polishing facility in Perth. Investor enquiriesinvestor@ Media enquiriescommunications@ About Burgundy Diamond Mines Limited Burgundy Diamond Mines is a premier independent global scale diamond company focused on capturing the end-to-end value of its unique vertically integrated business model. Burgundy's innovative strategy is focused on capturing margins along the full value chain of the diamond industry, including mining, production, cutting and polishing, and the sale of diamonds. By building a balanced portfolio of diamond projects in favourable jurisdictions, including the globally ranked Canadian mining asset, Ekati, and a diamond cutting and polishing facility in Perth, Burgundy has unlocked access to the full diamond value chain. This end-to-end business model with total chain of custody provides traceability along every step of the process, with Burgundy able to safeguard the ethical production of the diamonds from mining to marketing and discovery to design. Burgundy was founded in Perth, Western Australia. The company is led by a world-class management team and Board. Caution regarding Forward Looking Information This document contains forward looking statements concerning Burgundy Diamond Mines Limited. Forward looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward-looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements in this document are based on Burgundy's beliefs, opinions and estimates as of the dates the forward-looking statements are made, and no obligation is assumed to update forward looking statements if these beliefs, opinions or estimates should change or to reflect other future in to access your portfolio
