As indigenous leaders and northern workers absorb the shock of the dismissals of this week in the Ekati diamond mine in the northwest territories, industry observers say that the reduction of operations in Ekati is indicative of the challenges facing the diamond industry.
The National Chief of Dene, George Mackenzie, said that employment losses will affect the communities of Tłı̨chǫ “big.”
“Some of the workers have worked there for almost 30 years,” said Mackenzie, who is also a former head of Tłı̨chǫ. “They have invoices, and they have to take care of their family, and be without work will be a great effect on our community, in our region.”
The owner of Ekati, Mines of Diamond Burgoña, announced Wednesday that it was suspend open operations in Ekati and say goodbye to “several hundred employees and contractors.” The company is still undermining in the underground site of misery.
The head of Dettah of Yellowknives Dene First Nation (Ykdfn) said he was “very surprised and disappointed” by the dismissals.
“We have several members who worked in Ekati for years and years, and I hope that each of them receives fair treatment with their age,” said Chief Ernest Betsina.
Neither Betsina nor Mackenzie could say exactly how many citizens Ykdfn or Tłı̨chǫ lost their work. Betsina said that for those affected, she will work to make sure they get “the correct payment of how many years they have been serving” in Ekati.
Johnny McKinney is the regional vice president of the Kimberlite Division for the Union of Northern Workers (UNT). UNS represents about 400 workers in Ekati.
He said that the UNS told him that around 160 of its members were fired, but that the union has not yet seen an official list.
Not all those workers are necessarily north.
“What they have assured us is that through the selection process of the farewells who are considering the whole I was (Impact benefit agreements) Agreements and really considering that he tries to maintain the north numbers, “McKinney said.
Union members feel a complete spectrum of emotions, said McKinney: confused, sad, annoying, angry, indifferent and disappointed.
He said that any worker who received less than two weeks will receive two weeks of payment. Dismissed workers will be in “retirement” for the next 12 months, which means that they do not receive compensation wages because they can be called again to work within that period.
But Burgundy has not offered the union a timeline.
“Everything they have really given us is once the diamond prices recover, and once there is a greater cash flow, and all these other things they are seeing, once that happens, they will remember,” McKinney said.
He pointed out that until now Burgundy seems to be fulfilling his collective agreement.
‘Mining is a very difficult business’
Industry observers were less surprised by the news that Burgundy was stopping mining in Ekati’s Point Lake Open Pit, which entered production earlier this year.
Paul Zimnisky, an independent analyst of the New Jersey -based diamond industry, said several factors probably led the company to reduce operations.
The diamond market has been weak for more than two years, with low prices of 10 to 30 percent from historical maximums in early 2022, he said.
What is more, Zimnisky said, the demand for diamonds in China, the second largest consumer after the United States, decreased up to 50 percent last year. Laboratory cultivated diamond competition also continues to press the natural diamond market.
“So, those three combined factors have led to this elongated crisis in recent years,” he said.
Ekati is Canada’s first diamond mine, production began there in 1998, and Zimnisky said it becomes more difficult to make mines age as they age.
Usually, he said, a company will extract its most profitable sources from the beginning so that you can pay the debt and costs of building your mine. Over time, the company will look for other opportunities to continue production, “but the economy could be more challenging.”
He said Point Lake was one of the first economic Kimberlites that support the diamond discovered in Canada, but was one of the last in production, which suggests that it was not as favorable as other deposits in Ekati.
Zimnisky took a faint view of the future of Point Lake.
It is possible that Burgundy resume mining there if diamond prices recover, he said, but it will be difficult to maintain equipment and hire all those workers.
“Mining is a very difficult business and I think this is an example of that,” he said.
Karen Costello, executive director of the Territories of the Northwest and the Nunavut Mining Chamber, said that the situation in Ekati is a “true reflection” of pressures faced by diamond miners amid low prices, higher costs and challenges related to US tariffs.
But it is housed by the recent acquisition of a recent acquisition of a recent acquisition of a NWT NWT Diamond company Control interest in the WO Diamond project. The project includes eight mining leases about 23 kilometers from the diavik diamond mine and 53 kilometers from Ekati.
In an update on Friday, Burgundy said he plans to launch a “prefeasibility study on the proposed development of Fox Underground as a long -term project.” He described Fox as a “high value depot per kte” that was extracted for the last time in 2014.
The company plans to launch a new mine plan at the end of July.
