The owner of the Ekati Diamond Mine in the NWT has asked for a trading pause as it pursues external funding amid tariff pressures.
Burgundy Diamond Mines Ltd announced on Monday that it had applied for a temporary halt on the trading of its shares on the Australian Securities Exchange, as first reported by CBC.
The Australian-based company said the trading halt is necessary as it works to complete a funding package, which it called “critical to the company’s ongoing financial viability” and the operation of Ekati.
In a financing update, the company said US tariffs have resulted in a drop in rough diamond prices, particularly a 50-percent tariff on imports from India, which accounts for 90-percent of global diamond manufacturing.
“These tariff measures have placed additional downward pressure on rough diamond prices and materially impacted the company’s revenues,” Burgundy stated, adding it is pursuing funding from multiple third parties during “a highly challenging time for the global diamond industry.”
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The company has requested that the trading suspension remain in place until it has acquired adequate external funding or before the start of trading on October 16.
Burgundy said it has applied for funding from the Canada Enterprise Emergency Funding Corporation, a federal Crown corporation mandated to administer loans to Canadian enterprises impacted by tariffs and countermeasures. Burgundy said it was advised it is eligible for up to $150 million from the corporation and is undergoing a “due diligence process” that it expects will take “a matter of weeks.”
NWT Premier RJ Simpson said he discussed the impact of US tariffs on the territory’s diamond mining sector during a recent meeting with Pete Hoekstra, the US ambassador to Canada.
“He noted that India will continue to have a tariff as long as they are buying Russian oil. We talked about other ways to get around that, like diamond polishing within Canada, diamond polishing in the United States, things like that,” Simpson told Cabin Radio.
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“We did not get a commitment to have diamonds exempted from the tariffs, but I honestly wasn’t expecting something like that. He’s not the person who can make those decisions.”
Burgundy was previously granted a brief trading halt in July, after which the company announced it was temporarily suspending mining at its Point Lake open pit, resulting in hundreds of layoffs.
The company also released an updated mineral resource estimate and plan for the life of the mine, with the long-term goal of keeping Ekati open until 2040.
In April, the NWT government said it had granted the territory’s three diamond mines a collective $11.2 million in property tax relief amid “growing financial pressures and industry-wide uncertainty.” The territory also emptied out a fund intended to support projects that reduced carbon emissions at the mines, giving Ekati $1.7 million.
Ollie Williams contributed reporting.
