A quarter-century after diamonds put the Northwest Territories on the world’s jewellery map, the three mines that powered Yellowknife’s boom are edging toward the end of their natural lives and, with them, a fifth of the territory’s gross domestic product.
Rio Tinto’s Diavik operation is scheduled to ship its last ore in early 2026, while Gahcho Kué, run by De Beers Canada and Mountain Province, is projected to close in 2031. Ekati, now owned by Australia-based Burgundy Diamond Mines, hopes to stretch production to 2040 but is searching for fresh capital to stay afloat.
Mine closures slash jobs and royalties
Diamond mining directly and indirectly employs about 1,500 Northerners, a sizeable share of the territory’s 46,000 residents. “Diamond mining in the Northwest Territories has been incredibly pivotal to our economy over the last 25 years,” Industry Minister Caitlin Cleveland said in an interview. Yet polished stone prices have fallen sharply since a 2022 peak, with the International Diamond Exchange Index sliding to 90 points last August from almost 155 three years earlier.
Lower prices are colliding with United States tariffs of 50 per cent on gems cut and polished in India, the route taken by most northern stones. Burgundy blamed those “ongoing challenging market conditions” when it halted trading of its shares last September. Ottawa stepped in on 18 December 2025 with a C$115-million Large Enterprise Tariff Loan to keep Ekati running and preserve local jobs.
Royalties and payroll taxes from the mines make up much of the territory’s own-source revenue. Finance Minister Caroline Wawzonek has warned the bigger danger is not a cash-strapped government but a shrinking economy if workers leave. Paul Gruner, chief executive of the Tłı̨chǫ Investment Corp., put it bluntly: “Mines aren’t forever. They are finite resources.”
Diavik’s approaching closure underlines the timeline. Rio Tinto says commercial production will finish in early 2026, after which three years of remediation work will wind down the payroll.
Critical minerals offer a partial hedge
Territorial planners see opportunity in critical minerals such as rare earths, lithium and cobalt, resources Ottawa deems strategic for electric vehicles and clean technology. Cleveland notes that the territory holds nearly three-quarters of the minerals on Canada’s critical list. Unlike the large-scale diamond pits, any new mines are expected to be smaller and more dispersed, raising the stakes for permanent roads and power links.
The federal government’s Arctic Economic and Security Corridor, now before the new Major Projects Office, could unlock those links, but analysts caution the price deck must improve first. The International Energy Agency forecasts demand for critical minerals to double by 2030, yet northern deposits require higher prices to clear steep logistics costs.
For now, the territory’s focus is extending existing mine life and smoothing employment. Cleanup contracts, already awarded at Diavik, offer three years of work but few royalties. Indigenous development corporations, which rely on mine service deals for more than half their revenue, are lobbying for priority on remediation to keep skills and cash in the North.
If diamond prices remain subdued, diversification will be crucial. Ottawa’s loan to Ekati buys time, yet the hard-as-diamonds reality remains: without new projects or sustained support, Northern prosperity could fade as quickly as the sparkle that once drew the world northward.
