Gahcho Kué Mine Expansion Paused, Sparking N.W.T. Economic Concerns

The Government of the Northwest Territories expresses alarm over the pause in a key expansion project at the Gahcho Kué diamond mine, underscoring vulnerabilities in the region’s diamond industry.

Mine Operators Halt Tuzo Phase 3 Development

Mountain Province Diamonds, which holds a 49 percent stake in the joint venture with De Beers, announced the suspension of the Tuzo Phase 3 project due to challenging market conditions. This initiative targets a diamond-rich kimberlite pipe aimed at prolonging the mine’s operational life.

The decision leaves 2026 production targets unchanged, with operations shifting focus to current mining zones. To cut costs further, the company opts against naming a new CEO after the current leader’s exit.

Industry Minister Highlights Risks

N.W.T. Industry Minister Caitlin Cleveland describes the move as serious news for the territory. The mine serves as a vital employer and economic engine.

“The mine is not closing immediately, and near-term impacts remain limited,” Cleveland states. She points to persistent global diamond market struggles, including falling prices and rising operational expenses.

The pause exposes the territory’s heavy dependence on diamonds, Cleveland warns. “The diamond industry has carried the N.W.T. economy for decades, but the extended, profound decline in natural diamond prices underlines the need to diversify our resource economy,” her statement reads. “We need more projects, in more regions, across more commodities so that workers and communities are not exposed to the boom-and-bust cycles of any one sector.”

Funding and Support Measures

Mountain Province Diamonds reports receiving funding notices from De Beers totaling about $49 million, with an initial $38.8 million payment due March 17 and the balance in subsequent installments. Anticipated revenue from diamond tenders should cover the first payment, as talks with De Beers proceed.

The territorial government pledges support for workers and businesses should job losses arise and anticipates full compliance with labor standards from employers.