OTTAWA — The owner of a mine in the Northwest Territories will receive a $115 million loan from the federal government to keep operations running as U.S. tariffs depress the global diamond market.
Arctic Canadian Diamond Company Ltd., a subsidiary of Australia’s Burgundy Diamond Mines Ltd., operates the Ekati mine in the Lac de Gras region of Northwest Territories, roughly 300 kilometres northeast of Yellowknife.
Finance Canada says Ekati employs more than 600 workers and hundreds of additional contractors, more than 200 of them Indigenous. The department estimates the diamond sector is responsible for nearly 20 per cent of the territory’s economy.
Ottawa is extending the relief through its large tariff enterprise loan program, a $10-billion fund set up in March to help companies and workers affected by U.S. President Donald Trump’s global trade disruption.
Burgundy announced in July it had laid off employees at its Point Lake open pit mine because the operation wouldn’t be profitable in the tariff-stricken diamond market. Mining has continued at the underground Misery site, Ekati’s main production centre.
In a filing to the Australia Securities Exchange in September, the company said the United States’ 50 per cent tariffs on gem and jewelry imports from India — a hub for diamond refining — have driven down global prices.
The International Diamond Exchange’s price index shows sharp declines in diamond prices since 2022, which many analysts correlate with flagging demand and the rising popularity of lab-grown gems. But Burgundy said the imposition of tariffs has compounded declines over the past year.
“A further drop in rough diamond prices can be directly attributed to the imposition of the U.S. tariffs applicable to the global diamond trade,” Burgundy’s filing read.
“These tariff measures have placed additional downward pressure on rough diamond prices and materially impacted the company’s revenues.”
Burgundy previously asked to have its trading suspended on the Australian exchange until it could secure external financing.
The company said in July it would maintain its Point Lake site to resume mining if market conditions improved.
In a media statement, Finance Minister François-Philippe Champagne said the loan to Burgundy will offer “stability” and support jobs in the key northern mining industry.
Ottawa made changes to the loan facility in September to open the financing up to a broader range of firms and to require employers to prioritize worker retention.
The federal government gave Sault Ste. Marie, Ont.-based Algoma Steel $400 million via the large enterprise tariff loan facility in September, alongside $100 million from the Ontario government.
That company announced last month it would lay off more than 1,000 employees as part of its transition away from blast furnaces and toward a greener, more efficient process for steelmaking.
©2025 The Canadian Press
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