The parent company of Ekati Diamond Mine has initiated creditor protection proceedings, citing financial difficulties stemming from a significant drop in diamond prices due to global events. This move, initially reported by Cabin Radio, could jeopardize numerous jobs and substantial payments pledged to Indigenous communities, casting uncertainty over the mine’s future.
Arctic Canadian Diamond Company, the entity overseeing the Ekati Diamond Mine in the Northwest Territories, filed a series of documents in the Supreme Court of British Columbia last week. The court granted the company legal protection on Friday, extending the shield against creditors until at least May 11, safeguarding assets from potential lawsuits or seizures.
Established in 1998, Ekati Diamond Mine employed around 700 individuals in 2024, with over a quarter from northern regions and about 60% being Indigenous. However, the employee count had decreased to approximately 340 by March 31. The company marked a significant milestone last year by extracting 100 million carats of diamonds over its 26-year lifespan.
To ensure operational continuity and job preservation, the federal government extended loans worth $175 million to the company. N.W.T Industry, Tourism, and Investment Minister Caitlin Cleveland stated that the government is closely monitoring the court proceedings and advocating for the welfare of northern workers and communities throughout the process. Additionally, the government stands prepared to assist affected employees by providing necessary resources.
Concerns have been raised by various stakeholders, including Union of Northern Workers president Gayla Thunstrom and Yellowknife Centre MLA Robert Hawkins, emphasizing the potential repercussions for workers and communities. N.W.T. Member of Parliament Rebecca Alty expressed apprehension over the situation at Ekati, assuring that the government’s primary focus remains on supporting the mine’s employees during these challenging times.
Court documents reveal the company’s financial distress despite the federal loan, highlighting the inability to meet essential financial obligations crucial for sustaining Ekati Mine’s operations. The company is grappling with debts amounting to approximately $655 million, including future cleanup costs estimated at $428 million upon the mine’s closure, projected around 2040. The company holds assets and funds to cover a substantial portion of the cleanup expenses.
The company attributed the financial turmoil to various global factors impacting diamond prices, such as the emergence of lab-grown alternatives, reduced purchases from China, and tariff-related implications. Diamond prices plummeted from about $125 per carat in late 2024 to approximately $33 per carat by December 2025, representing a staggering 74% decline. This downturn led to a drastic reduction in diamond sales from over $600 million in 2024 to around $253 million the following year.