Burgundy Diamond Mines is calling on the government of Canada’s Northwest Territories to offer assistance to the diamond mining industry during the ongoing market slowdown. The company warns that without such aid, it may need to reconsider its ownership of the Ekati diamond deposit.
In a letter addressed to Northwest Territories Premier R.J. Simpson, Burgundy requested adjustments to existing policies that it claims impose excessive financial burdens on the diamond mining sector.
Burgundy CEO Kim Truter emphasized the company’s commitment to improving the economic viability of the Ekati mine since its acquisition. “Our team has worked tirelessly to strengthen the balance sheet, enhance efficiencies, reduce costs, optimize sales channels, and extend the mine’s life,” Truter stated. However, he noted that diamond prices have fallen by at least 20% since the acquisition, placing the industry in turmoil. Truter expressed frustration over the lack of support from stakeholders during this challenging time.
The company has also highlighted increasing environmental requirements and inflexible government agencies as significant obstacles. Burgundy is urging the government to make several changes, including reducing the substantial funds required for mine reclamation, allowing for a more flexible sales process for rough diamonds, and streamlining the environmental permit process.
Burgundy believes that these adjustments will enable it to operate the Ekati mine until at least 2040. However, without support, the company may have to abandon the site. “If this trend continues, Burgundy will need to reevaluate the viability of the Ekati asset and shift its focus to growth in other areas,” Truter warned.
Burgundy acquired the Ekati mine from Arctic Canadian Diamond Company in 2023 for $136 million. Following the purchase, it returned ownership of the Ellendale mine in Australia to Gibb River Diamonds.
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