Ekati mine’s future in doubt as company files for creditor protection
By Hina Alam
Ekati Diamond Mine’s parent company has filed for creditor protection, saying it is unable to pay bills after global events caused the gem’s prices to fall by more than 70 per cent within a year.
The filings, as first reported by Cabin Radio, put at risk hundreds of jobs and millions of dollars in promised payments to Indigenous communities. They also put the long-term future of the mine in doubt.
Arctic Canadian Diamond Company, the Calgary-based operator of Northwest Territories’ Ekati Diamond Mine and a subsidiary of Australian mining company Burgundy Diamond Mines, filed a tranche of documents in the Supreme Court of British Columbia this past week.
The court granted the company legal protection on Friday, giving it at least until May 11 — a temporary shield from creditors either suing for or seizing assets.
Ekati’s diamond mine opened in 1998. It had about 700 employees in 2024, of which about 28 per cent were northern residents and about 60 per cent of those were Indigenous. However, that workforce had collapsed to about 340 employed by March 31.
Last year, the company hit a milestone, digging up 100 million carats of diamonds across its 26-year life.
The company received a $175-million worth of loans from the federal government to ensure operations remain ongoing and jobs were protected.
In a statement issued Monday, N.W.T Industry, Tourism and Investment Minister Caitlin Cleveland said her government is “closely monitoring the court proceedings and will continue to advocate for the interests of northern workers and communities as this process unfolds.”
Cleveland also said the territorial government is ready to support affected workers by connecting them with resources.
Yellowknife Centre MLA Robert Hawkins said he thinks the message glosses over what’s at stake.
“The key is people feel the risk and they can keep saying, ‘Well, don’t worry, we’re going to have these major projects in a couple of years.’ Well, really? That major spending and major development isn’t going to happen for one year or two years, three or five years,” Hawkins said.
“So it’s a lot of lean days ahead if this is the type of message we’re sending.”
In a statement to CBC News, Union of Northern Workers president Gayla Thunstrom said it’s a “very stressful time” for the union’s members.
“It’s frustrating to see this type of thing keep happening over and over again with each new owner. Sometimes it feels like northern workers and communities are treated like collateral by these corporations, but this is about more than markets and portfolios — this is about workers and their livelihoods,” Thunstrom wrote.
N.W.T. MP Rebecca Alty said in a written statement on Monday that she’s “concerned” by what’s happening at Ekati and that the federal government will have more to say in the coming days. She said the government’s main focus is on the mine’s employees.
“We will be there to support them through this difficult time,” the statement reads.
Documents detail financial problems
The court documents show the company is “financially distressed” despite the federal loan.
The Burgundy Group lists total liabilities of about $655 million, while Arctic Canadian Diamond’s liabilities related to Ekati appear to make up the bulk of that.
“If Arctic Canadian Diamond Company cannot stabilize its operations, it will not be able to meet its ongoing financial obligations that are necessary to sustain the current operations at the Ekati Mine, including payments to employees, contractors, and suppliers,” says the 42-page petition filed in the court.
“Failure to make these payments will inevitably jeopardize the ongoing operations at the Ekati mine, to the detriment of Arctic Canadian Diamond Company’s stakeholders.”
According to the filing, the Arctic Canadian Diamond Company has about $343 million in liabilities, including about $107 million to a group of private lenders, about $63 million to trade creditors, and $175 million to the Canada Enterprise Emergency Funding Corporation.
The filings also state that as of Dec. 31, 2025, future cash required to settle reclamation obligations at the mine are estimated at $428 million. But the filing claims bonds, trust funds and cash collateral totalling almost $200 million toward that liability.
In November, the Northwest Territories government made a payment of around $2 million to help keep Ekati afloat. The documents show the government covered interest costs on a short-term bridge loan — provided by a group of private lenders — while waiting on the federal government’s $175 million emergency funding.
The document also shows the federal government funding came in two stages, with riders attached.
In December, the company was given $115 million. But for it to receive the rest of the $60 million, it was required to raise at least $25 million in new equity investment by Friday — the same day it filed for creditor protection. The documents do not detail if that amount was raised.
Global factors affecting Canadian diamonds
In the filing, the company blamed the collapse on various global factors, beginning with the price of the precious stones per carat.
It said diamond prices were in free fall, dropping from around $125 per carat at the end of 2024 to around $33 by December 2025. That’s a fall of about 74 per cent.
“The factors impacting diamond prices include the emergence of lab-grown alternatives, decline in purchases from China, and tariff-related impacts,” said Brent Mierau, corporate secretary and financial head of Arctic Canadian Diamond Company, in the 36-page affidavit.
“While I understand that a reduction in the United States tariffs imposed on India has occurred in 2026, the tariffs have continued to result in a reduced American demand and a buildup of inventory with wholesalers (resulting in wholesalers curtailing their purchase of rough diamonds). The commencement of the conflict in Iran has also had a negative impact on diamond pricing.”
The documents show the company brought in more than $600 million in diamond sales in 2024. By the following year that number had fallen to about $253 million.
Related stories from around the North:
Canada: Ekati Diamond Mine gets $115M federal loan, avoids bankruptcy, CBC News
Greenland: Greenland’s leader hails EU as trusted friend and urges investment in its minerals, The Associated Press
Norway: Lawmakers in Norway make a deal opening up for deep sea mining in Arctic Ocean, The Associated Press
Russia: Norilsk Nickel admits trouble as Russia’s war-torn economy suffers due to sanctions, The Independent Barents Observer
Sweden: Just how significant is the discovery of rare earth metals in Arctic Sweden?
United States: Alaskan tribes sue B.C. gov’t over mines in far northwest, CBC News
