The parent company of the Ekati Diamond Mine has sought creditor protection due to a significant decline in diamond prices, dropping more than 70% in a year. This move jeopardizes hundreds of jobs and millions of dollars in payments to Indigenous communities, casting uncertainty over the mine’s future.
Arctic Canadian Diamond Company, which operates the Ekati Diamond Mine in the Northwest Territories, filed for creditor protection in the Supreme Court of British Columbia. This legal shield, granted until May 11, aims to safeguard the company from creditor actions against its assets.
The Ekati mine, established in 1998, had a workforce of around 700 employees in 2024, with a significant portion being Indigenous and northern residents. However, by March 31, the number of employees had dwindled to approximately 340. Last year, the mine achieved a milestone of extracting 100 million carats of diamonds over its 26-year history.
To sustain operations and protect jobs, the company secured a $175 million loan from the federal government. The government is closely monitoring the situation to advocate for the welfare of northern workers and communities during this challenging period.
Despite the federal loan, court documents reveal that the company is facing financial distress, with total liabilities amounting to about $655 million. The company’s inability to stabilize operations may hinder meeting financial obligations crucial for sustaining the Ekati mine’s current activities.
Global factors such as declining diamond prices, the rise of lab-grown alternatives, reduced Chinese purchases, and tariff impacts have contributed to the company’s financial challenges. Diamond prices plummeted from $125 per carat in 2024 to around $33 per carat by December 2025, resulting in a 74% decrease in value.
The company’s diamond sales plummeted from over $600 million in 2024 to approximately $253 million the following year. The drop in demand and price erosion have strained the company’s financial viability, prompting the need for creditor protection and government intervention to navigate this crisis.