24 November 2024
True Believer
The following article was written by Carol Besler for Up Here Business Magazine (Issue number 4, 2024). The article has been reproduced with permission from the editor.
IN 2023, not long after summer had broken out across the NWT, a small company listed on the Australian stock exchange announced it was buying the Ekati diamond mine. That company was Burgundy Diamond Mines, and it was paying US$136 million for Ekati, the first diamond mine in Canada. Kim Truter, the company’s CEO and veteran of diamonds in the Canadian Arctic, was confident about the 25-year-old mine’s prospects. As he would later tell Up Here Business, “We should not have bought the Ekati mine if we didn’t think there was a lot of potential.”
One could be forgiven for finding the timing of Truter and Burgundy’s move hard to fathom. Conventional wisdom says diamond mining in the NWT has reached its sunset years. Production is strong at the moment—it was valued at more than US$1.5 billion in 2023—but that won’t last. Diavik, which has been in commercial production for more than 20 years, is winding down operations and will stop mining diamonds in 2026. De Beers says it will follow suit in 2031, when it plans to shut down production at its Gahcho Kué mine.
And even if those projects weren’t aging, the diamond market has been challenging. Prices for rough diamonds have been in steady decline over the past four years. According to diamond analyst Paul Zimnisky, they tumbled between 15 per cent and 20 per cent in 2023 alone and continued spiraling downward during the first two quarters of 2024...