Canada’s Northwest Territories at a Crossroads as Diamond Mines Shut Down
For decades, the glittering allure of diamonds drove economic prosperity in Canada’s Northwest Territories, transforming this vast, remote region into the world’s third-largest diamond exporter. But as the curtain falls on three of its major diamond mines by the decade’s end, the Territories face an urgent question: what comes next?
The Rise and Fall of a Diamond Boom
Yellowknife, the capital nestled below the Arctic Circle, was first shaped by an epic gold rush in the early 1900s. That boom laid the groundwork for modern infrastructure and communities, but as gold reserves dwindled, prospectors struck another precious vein — diamonds — in the 1990s. This discovery propelled the Northwest Territories onto the global stage.
However, the diamond-mining era is rapidly unraveling. The closure of the Diavik mine in spring 2026, operated by mining titan Rio Tinto, signals a broader decline. Ekati, the region’s largest diamond mine owned by Burgundy Diamond Mines, is struggling financially and threatens closure before its original 2030 schedule.
Economic Consequences and Community Impact
The diamond mines have been a cornerstone for thousands of jobs, especially for Indigenous communities. About half of the Northwest Territories’ 45,000 residents are Indigenous, many employed directly by mines or in ancillary sectors like construction, catering, and aviation. Skilled workers earned six-figure salaries amidst the challenging Arctic conditions, a rare economic boon in the region.
George Betsina, a Dene First Nation miner, encapsulates the bittersweet reality. After decades of working underground and raising his family supported by the mines, he and his brothers were laid off this summer. “Half my boys’ lives, I was in the mines,” Betsina reflects. Such layoffs not only destabilize household incomes but ripple through communities reliant on mining’s economic pulse.
External Pressures Accelerating the Decline
Multiple forces are hastening the end of diamond mining here. Globally, lab-grown diamonds are undercutting demand for natural stones by offering cheaper and environmentally friendlier alternatives. Meanwhile, international trade tensions, particularly tariffs imposed by the United States on diamond-processing hubs like India, are inflating costs and dampening sales, severely squeezing Canadian producers who rely on Indian cutters.
Burgundy Diamond Mines, which owns the Ekati operation, has seen mounting losses exacerbated by these tariffs and recently sought financial relief from the Canadian government. Worker unions report struggles with delayed or withheld severance payments, adding a human dimension to the industry’s fiscal crisis.
Seeking New Foundations: Critical Minerals and Arctic Development
With diamonds no longer the shining path forward, territorial leaders are looking to diversify. The region is rich in critical minerals such as rare earth elements, essential for everything from smartphones to defense technologies. This could position the Northwest Territories as a key player amid global supply chain disruptions influenced heavily by China’s dominance in this sector.
Indeed, the U.S. Department of Defense has invested in local rare earth mining projects under the Biden administration’s efforts to shore up supply chains — a political and economic vote of confidence. Premier R.J. Simpson emphasizes, “There is such interest in critical minerals ... and we have an abundance of those in the Territories.”
Yet history offers caution. Mining in the region has environmental costs; the infamous Giant mine left a toxic legacy that took decades and millions to remediate. The challenge lies in balancing economic renewal with environmental stewardship and justice for Indigenous peoples.
Human Stories Amid Transition
For workers like Melanie Rabesca, the closing mines mark both an end and a hopeful new beginning. After breaking free from substance addiction, Melanie found purpose and community working underground at Diavik. Now retrained as a heavy equipment operator alongside her husband, she dreams of eventually moving into mental health services — a reflection of the broader need to support communities through these upheavals.
“It’s exciting and scary,” Rabesca shares. “This is all I’ve ever known since I was 22.” Her story encapsulates the human cost and resilience that underpin this economic transformation.
Looking Ahead: Challenges and Opportunities
- Economic Diversification: Can the Northwest Territories build a sustainable economy beyond diamonds through mining critical minerals and developing Arctic infrastructure?
- Environmental Responsibility: How will future mining projects balance the region’s ecological fragility with economic needs?
- Indigenous Inclusion: What roles will Indigenous communities play in shaping and benefiting from new economic pathways?
- Federal and International Support: Will government policies and investments accelerate the transition and cushion the social impact?
As Canada’s northern frontier grapples with this turning point, the resilience of its people and resourcefulness of its leaders will determine if the Northwest Territories can carve out a promising new chapter.
