Burgundy says Ekati layoffs are part of ‘planned transition’

The owner of the NWT’s Ekati diamond mine says it is letting around 35 workers go as part of a move from one open pit to another.

Burgundy Diamond Mines said on Friday its workforce will shrink “as part of the planned transition from the Ekati Sable pit to our newest Point Lake pit.”

Point Lake was pitched to regulators as a way to keep the mine active during a gap between the end of mining at other pits and the start of future projects that are expected to remain in development until nearer the end of the decade.

“Adjustments to the workforce are often required as the mine evolves. We anticipate reductions to occur in the mid-April time-frame,” Burgundy spokesperson Eric Ingle said by email.

“I can confirm that the employer advised the union of the layoffs and, of the situations we are currently aware of, they are following their obligations under the collective agreement,” Union of Northern Workers president Gayla Thunstrom told Cabin Radio in a statement.

“It was very hard news for the union and the members to hear.”

Burgundy reported a preliminary net loss of US $94.7 million in the 2024 calendar year, a year during which it had asked the NWT government for more support.

Within its figures, the company said it had reduced the value of its Ekati asset by US $127 million. Burgundy attributed that to shifting diamond prices that have an effect on what the mine and its output are expected to be worth in future.

Lab-grown diamonds have significantly disrupted the natural diamond market in recent years and suppressed prices.

Burgundy’s message to investors is that the market will turn and patience is required. The company argues that lab-grown diamonds have likely reached their peak market share.

The company says it expects to produce an updated mine plan in the coming weeks. A longer-term vision, possibly mapping out how Ekati could remain open into the 2030s, is due later this year.