The NWT government said it is trying to streamline “policy and processes” to help diamond mines after one mine owner threatened to leave if things do not improve.
In a letter to Premier RJ Simpson this week, Burgundy – which owns the Ekati mine – said decreasing diamond prices had left the industry “in turmoil.”
The company called the NWT’s regulatory requirements “onerous” and government agencies “inflexible.”
“Should this trend continue, then Burgundy will need to revisit the viability of the Ekati asset and focus on growth elsewhere,” the letter asserted.
Responding on Wednesday afternoon, a spokesperson for cabinet said Simpson was “reviewing the concerns raised” in the letter and a list of measures Burgundy had requested.
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Burgundy’s wishlist included changes that would tie up less cash related to mine closure, speed up the exporting of diamonds out of the territory, ease regulatory requirements, and ensure the company doesn’t have to renegotiate benefit agreements with communities when new legislation kicks in.
Simpson is “taking the time needed to work with colleagues and relevant departments to determine how, and if, these concerns and proposed supports can be addressed,” a spokesperson said by email.
The premier and his office would not comment further until he has responded directly to Burgundy, the spokesperson added. Neither Simpson nor industry minister Caitlin Cleveland were made available for interview, while Burgundy’s press office did not respond to interview requests.
For two decades, the NWT’s economy has been broadly reliant on diamond mining at Ekati, its Rio Tinto-owned neighbour Diavik, and mines operated by De Beers.
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However, the price of mined diamonds has fallen about 20 percent in the past year as lab-grown diamonds gain market share.
On Wednesday, the GNWT said it “acknowledges the significant global challenges, from geopolitical tensions to the rise of lab-grown diamonds and the G7’s ban on Russian gems, and how they are currently impacting the diamond industry.”
The territory said it is “working with our regulatory partners to identify new opportunities and find efficiencies within the current legislative framework,” and working with Indigenous governments and industry to “identify areas where policy and processes can be streamlined.”
“Though global trends cannot be controlled, the GNWT remains committed to supporting the diamond industry and the local communities and businesses that depend on them,” the territory concluded.
Burgundy has presented mixed messages about Ekati’s health this week.
While Truter’s letter to Simpson suggested Ekati’s financial viability was being eroded, the company separately told investors it had completed a significant debt repayment and the mine “continues to outperform expectations.”
