What Diavik’s impending closure could mean for Yellowknife
As Rio Tinto plans to close the Diavik diamond mine, the company says it’s considering the impact on communities across the NWT. Yellowknife is expected to feel the greatest effects.
Diavik – the second mine to open in the NWT, beginning operations in 2003 – is set to close in 2025. Representatives from Rio Tinto, which owns and operates the mine, told city councillors on Monday that could have direct impacts on employment, population levels, and revenue for many communities in the territory, particularly Yellowknife.
The mine, on an island in Lac de Gras roughly 300 km northeast of Yellowknife, is one of the largest employers in the territory. According to Rio Tinto, Diavik provides jobs for about 1,100 people, of whom 486 are northerners. The mine contributes nearly 10 percent of the NWT’s GDP, spending a reported $9.3 billion in the North since 2000.
“As you can imagine, if you remove 10 percent of that GDP, that is going to have some pretty significant impacts not just on the territory, but also on the city of Yellowknife,” Amanda Annand, a community advisor at Diavik, told councillors.
“The impacts are expected to be the most pronounced in the City of Yellowknife because the majority of our northern employment comes from the city.”
In 2020, about 350 Yellowknife residents were employed at Diavik, accounting for 32 percent of the mine’s workforce. The company said that translates to 3.6 percent of the city’s entire employment income and millions of dollars in spending for Yellowknife’s retail sector.
As the mine prepares to close over the next four years, that spending and employment is expected to decrease. Rio Tinto expects that to affect population numbers and federal transfer payments to the NWT.
The mine’s contribution to the territory’s GDP is projected to drop from $430 million in 2019 to $110 million by 2025. Rio Tinto estimates Yellowknife could lose between 406 and 622 residents by 2030.
To lessen the impact on employees, Rio Tinto plans to launch a support program that helps workers redeploy within the company or gain employment elsewhere.
“We’re not just walking away and leaving people with no prospects or just leaving the job market to kind-of pick up for the slack as we ramp down,” said Cherish Winsor, a Diavik corporate relations representative. “We want to make sure that people are gainfully employed.”
How hard communities are hit by Diavik’s closure depends on factors like whether neighbouring diamond mine Ekati remains open beyond 2024, or if the Nico mine outside Whatì begins production in 2025 as planned.
The Nico mine – a cobalt, gold, bismuth and copper project – has passed its environmental assessment. Owner Fortune Minerals has signed an access agreement with the Tłı̨chǫ Government to construct a spur road from the recently completed Tłı̨chǫ Highway to the site.
Rio Tinto says it is now consulting communities about how northerners could benefit from Diavik’s closure. Opportunities at the mine range from demolition to camp and support services and post-closure monitoring and maintenance, the company said.
The company plans to compile feedback from community engagements into a report, including proposed socio-economic mitigation measures, that it will incorporate into final closure planning.