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Diamond mines operating in Canada’s Northwest Territories (NWT) will get additional tax relief totaling approximately $8.8 million to help weather the market slowdown.
The Government of the Northwest Territories has extended the targeted program initiated in March for an additional year, to provide economic stability for workers and businesses, it said Tuesday. All three of Canada’s diamond mines, Ekati, Diavik and Gahcho Kué, are in that region. The NWT relies heavily on diamonds, which represent the largest portion of its gross domestic product (GDP).
“The extension…reflects ongoing pressures facing the global diamond industry, including volatile markets, trade disruptions, and elevated operating costs,” the government stated. “The…decision is intended to reduce the risk of sudden economic disruption while longer-term economic transition and diversification work continues. Diamond mining remains the NWT’s largest private-sector industry and a cornerstone of the territorial economy.”
Funds saved because of the extension, which runs until 2027, are earmarked for employee wages, meeting obligations to local contractors and Indigenous business partners, and maintaining operations.
The downturn in the market has presented challenges for the industry. Most recently, Burgundy Diamond Mines, the owner of the Ekati deposit, secured a CAD 115 million ($83.3 million) loan from Canada Development Investment Corporation (CDEV) to keep the business running.
Image: Rough diamonds from the Ekati mine. (Burgundy Diamond Mines)
