Northwest Territories Mining Industry suffers as LGD sector improves

The northern mining industry, a significant contributor to the global diamond market, is experiencing a downturn as the popularity of lab-grown diamonds surges. Hundreds of employees at a diamond mine in the Northwest Territories (NWT) are being laid off as production halts, highlighting the industry’s struggle to compete with the cheaper, lab-grown alternatives.

The global diamond market has been significantly impacted by the rise in lab-grown diamonds, which offer a similar sparkle at a fraction of the price. This has led to a decline in demand for natural diamonds, particularly in key markets like the United States and China. The prices of round diamonds have fallen by 74 per cent since 2020, further exacerbating the industry’s challenges.

The crisis in the diamond industry is not limited to Zimbabwe and Canada. Other major players, such as Rio Tinto and Anglo American, are also considering closures and spin-offs of their diamond businesses due to the challenging market conditions.

The impact of these job losses and mine closures is significant. A recent report by research firm Impact Economics warns that mine closures could cost the NWT 1,500 jobs and prompt more than 1,100 residents to leave.

The northern mining industry’s future remains uncertain. While some companies, like Burgundy Diamond Mines, are maintaining their operations to ensure a rapid restart should market conditions improve, others are exploring alternative strategies to stay afloat.