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CBC
21-05-2025
- Business
- CBC
Indigenous development corps. will be hit hard by N.W.T. diamond mine closures, report says
With the N.W.T.'s diamond mines facing an uncertain future, some Indigenous businesses are warning of the impact the mines' closures could have on local communities. Diamond mining brought in over $104 million in revenue to three N.W.T. Indigenous development corporations and created 355 jobs for local Indigenous people in 2023, according to a new report analyzing the impact of the diamond mines. The report was commissioned by the Det'on Cho Group of Companies, Tłįchǫ Investment Corporation, and Metcor Inc., and done by economist Graeme Clinton. The companies are the economic arms of Tłįchǫ Government, Yellowknives Dene First Nation and the North Slave Metis Alliance, respectively. Clinton found that jobs, both directly and and indirectly related to diamond mining, generated $39.6 million in income for Indigenous workers. Those jobs were spread across the communities of Yellowknife, Ndilo, Dettah, Behchoko, Whatì, Wekweeti, and Gameti. Paul Gruner, CEO of Tłı̨chǫ Investment Corporation, called the figures "alarming." Gruner said with all three N.W.T diamond mines potentially approaching closure, the financial hit could be huge. He says it is like removing the major block that Indigenous corporations rely on to continue to function. "It's kind of like having a three-legged stool. If you remove one of those do you now overcome major revenue line items and employment?" Gruner said. He said over the years, the revenue generated from mining increased the capacity of the Indigenous corporations to support other key projects and initiatives to support the communities. This includes multi-year housing projects in the Tłįchǫ region, a community freezer project by North Slave Métis Alliance and Det'on Cho Logistics' expansion into Nunavut and Saskatchewan. "I think there's been a really great deal of benefit that's been gained by the Indigenous communities and the corporations," Gruner said. Gruner said the purpose of Clinton's report is to raise awareness and engage with both territorial and federal governments to show the financial impact of the mines' closures at the community level. "It puts a face to it. It's not just a line item. These are very real people, families that put food on their table every day," Gruner said. "Now we've got something that we can bring forward to the federal government." Gruner said the territory needs to consider what its economy might look like going forward. He said that includes looking at developing new mines for base metals, precious and critical minerals, and addressing infrastructure gaps to help get those minerals to market, he said. That includes advancement of critical infrastructure like the Slave Geological Province Corridor, a $1.1-billion project that would see an all-season road built between mineral-rich areas northeast of Yellowknife and western Nunavut. The territory is currently preparing to enter the environmental assessment phase for the proposed project. Outlook isn't great Leigh-Anne Palter is the CEO of Denesoline Corporation, the economic arm of Łutsel K'e Dene First Nation. She says her community is small, remote and has already suffered at the hands of its former CEO, Ron Barlas, who was found by the N.W.T. Supreme Court last year to have "abused" his position by funnelling millions of dollars from the Denesoline Corporation. "The outlook isn't great for this community in particular," Palter said. The First Nation has about 800 members, and around 300 live in the community itself, which is on the east arm of Great Slave Lake, about 150 kilometres from Yellowknife. Lutsel K'e is one of the closest communities to the N.W.T. 's three active diamond mines and it has some form of impact benefit agreement with each one. Palter said without an active and viable mining industry or similar sort of industry to take its place, "it would be a very significant impact." She said the workers who are already trained and working in the mining industry could go elsewhere if the territory doesn't have an industry to provide opportunities to support them. That would then make it even more difficult to reconstitute a viable mining industry in the North. "We don't want to lose all the gains of past decades in terms of training people, creating good businesses to have them," Palter said. Palter says with new government policies and tax breaks aimed at propping up the territory's diamond mines, things are looking more hopeful. She also pointed to some northern MPs, including N.W.T.'s Rebecca Alty, being named to the federal cabinet. "With the election now behind us...I see those as all great signs," she said. The territorial government's decision to temporarily reduce property taxes paid by N.W.T. mines is also "very helpful," she said.
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.
