The Gahcho Kué diamond mine’s owners are postponing work that was set to help the mine stay in operation until at least 2030.
In a late Monday news release, Mountain Province Diamonds – which co-owns the NWT mine with De Beers – said the Tuzo Phase 3 project will be “paused.”
The company said the decision followed “a careful assessment of the project’s economics considering the prevailing market environment.”
It’s the latest sign of financial trouble in the diamond mining sector, which remains the heart of the territory’s economy.
Industry minister Caitlin Cleveland said the announcement was “serious news for the Northwest Territories.”
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“A decision that shortens the mine’s operating timeline creates real concern for workers, families, northern businesses and communities connected to this operation,” Cleveland said in a statement.
“The mine is not closing immediately, and near-term impacts are expected to be limited. But this decision reflects how challenging conditions in the global diamond market have become.”
The decision was announced just days after Gahcho Kué formed one of the only bright spots in an otherwise dismal De Beers production report. Output at the mine has shot upward as workers begin making inroads on a high-grade ore body that they spent most of 2025 slugging through waste rock to reach.
That project, named Nex, is not affected according to Mountain Province, which said it did not expect overall carat production in 2026 to be affected by the decision to pause work at Tuzo.
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”The partners remain committed to responsibly managing operations at the mine and will continue to monitor market conditions to determine the optimal timing for any future development of the Tuzo Phase 3 project,” Monday’s statement added.
Even so, the statement also set out a litany of financial issues occurring at the mine, including failures to pay agreed sums between the joint venture’s two partners.
Mountain Province said De Beers is requesting payment of just under $40 million by mid-March, adding that diamond sales “may be sufficient” to reach that figure. The two companies are in talks, Mountain Province stated, and are looking for ways to reduce costs at Gahcho Kué.
In an emailed response to Cabin Radio after this article was first published, De Beers confirmed the Tuzo pause and that it had “exercised its contractual rights … protect its commercial interests” regarding Mountain Province’s debt.
“This was not a decision made lightly, especially given Gahcho Kué’s importance to the region, the investments made in the mine to date, and the strong safety and operational performance achieved over the past two years at Gahcho Kué,” a De Beers spokesperson stated.
“Following the pause, operations at Gahcho Kué will focus on safely extracting ore from the Northeast Extension (NEX) kimberlite deposit. Safety and operational discipline remain the top priorities.”
GNWT ‘will ensure worker supports are visible’
Cleveland, in her Monday statement reacting to the news, said the GNWT could not control global markets but “we take responsibility for how the impacts are managed here at home.”
”To that end, we will ensure worker and business supports are visible and accessible, and we will continue to expect employers to meet their obligations under NWT labour standards if there are job impacts,” she wrote.
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“This announcement also reinforces a broader reality for our territory: our economic base remains too dependent on a single commodity. The diamond industry has carried the NWT economy for decades, but the extended, profound decline in natural diamond prices underlines the need to diversify our resource economy. We need more projects, in more regions, across more commodities so that workers and communities are not exposed to the boom-and-bust cycles of any one sector.”
While the mining industry helped build the territory, she added, the NWT was now pursuing “the next generation of responsible resource development and economic opportunity.”
The precise impact on Gahcho Kué’s mine life wasn’t stated by Mountain Province.
At the Yellowknife Geoscience Forum in November last year, mine manager Kevin Gostlin suggested Tuzo was intended to help the mine stay in operation from 2027 to 2030, with ore processing complete by 2031.
About 850 people work at the mine, including 600 staff and 250 contractors. Just under 200 are what Gostlin called “NWT Indigenous.” Whether any jobs are directly affected by Monday’s announcement, and how many if so, was not stated.
Gostlin’s message in November had been that Gahcho Kué was trying hard to remain afloat but “we need the diamond market to recover,” and the market has shown virtually no sign of doing so.
Tariffs imposed by the United States on India may ease, which would be a shaft of light for the industry (as India is a key thoroughfare between mines and the market), but the global geopolitical situation, the broader impact of tariffs and the rise of cheaper lab-grown diamonds have suppressed the natural diamond market for years.
The NWT now faces the prospect of going from three diamond mines to zero in a hurry.
Diavik ceases operations next month. Gahcho Kué’s future beyond 2026 is now unclear, and the Ekati mine, despite a nine-figure federal loan, is not guaranteed to recover from its own financial troubles.
