Burgundy Diamond Mines Ltd. laid off “several hundred” workers after halting part of its Ekati operations in northern Canada, adding another blow to the country’s struggling

diamond mining industry.

Chief executive Jeremy King said the company has temporarily suspended its Point Lake open-pit mine after record-low global diamond prices made the operation uneconomical.

“The diamonds assessed in the marketplace have just shown that in this market right now, Point Lake is non-economic and in fact we’d be losing money on a daily basis there,” King said in an interview. Its nearby underground mine is unaffected by the suspension, he added.

Burgundy’s Ekati operations are one of three diamond mines in the

Northwest Territories

, all of which reported financial losses last year. The diamond industry is grappling with one of its worst slumps in decades, hit by collapsing Chinese demand, uncertainty around

U.S. tariffs

, and competition from lab-grown alternatives.

The closure is expected to have significant ripple effect on nearby Indigenous communities, which have long relied on diamond mining for jobs and revenue. Local leaders said the scale of the job cuts caught them off guard.

“It’s shocking. It is sad,” said Marc Whitford, president of the North Slave Métis Alliance. “We’re talking about a whole part of that line suddenly carved away and gone, with all these many jobs that are gone primarily out of the indigenous communities.”

The diamond industry has generated more than $104 million for three Indigenous development corporations and supported 355 jobs for local Indigenous workers, according to an economic study published in April.

King didn’t disclose the exact number of layoffs, but said the company is working toward a point where it can recall workers and reactivate Point Lake when diamond prices recover.

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Australia-based Burgundy bought the Ekati mine, which is about 210 kilometres south of the Arctic Circle, two years ago.

The

Canadian Broadcasting Corp.

earlier reported on the layoffs and stoppage at the open-pit mine.

Bloomberg.com