Ekati Diamond Mine’s parent company has filed for creditor protection, saying it is unable to pay bills after global events caused the gem’s prices to fall by more than 70 per cent within a year.

The filings, as first reported by Cabin Radio, put at risk hundreds of jobs and millions of dollars in promised payments to Indigenous communities. They also put the long-term future of the mine in doubt.

Arctic Canadian Diamond Company, the Calgary-based operator of Northwest Territories’ Ekati Diamond Mine and a subsidiary of Australian mining company Burgundy Diamond Mines, filed a tranche of documents in the Supreme Court of British Columbia this past week.

The court granted the company legal protection on Friday, giving it at least until May 11 — a temporary shield from creditors either suing for or seizing assets. 

Ekati’s diamond mine opened in 1998. It had about 700 employees in 2024, of which about 28 per cent were northern residents and about 60 per cent of those were Indigenous. However, that workforce had collapsed to about 340 employed by March 31.

Last year, the company hit a milestone, digging up 100 million carats of diamonds across its 26-year life. 

The company received a $175-million worth of loans from the federal government to ensure operations remain ongoing and jobs were protected.

In a statement issued Monday, N.W.T Industry, Tourism and Investment Minister Caitlin Cleveland said her government is “closely monitoring the court proceedings and will continue to advocate for the interests of northern workers and communities as this process unfolds.”

Cleveland also said the territorial government is ready to support affected workers by connecting them with resources.

N.W.T. MP Rebecca Alty said in a written statement on Monday that she’s “concerned” by what’s happening at Ekati and that the federal government will have more to say in the coming days. She said the government’s main focus is on the mine’s employees.

“We will be there to support them through this difficult time,” the statement reads.

Documents detail financial problems

The court documents show the company is “financially distressed” despite the federal loan.

“If Arctic Canadian Diamond Company cannot stabilize its operations, it will not be able to meet its ongoing financial obligations that are necessary to sustain the current operations at the Ekati Mine, including payments to employees, contractors, and suppliers,” says the 42-page petition filed in the court. 

“Failure to make these payments will inevitably jeopardize the ongoing operations at the Ekati mine, to the detriment of Arctic Canadian Diamond Company’s stakeholders.”

The company also had other loans. 

It owed about $107 million to a group of private lenders. It also owed about $63 million to trade creditors, although it did manage to negotiate debt forgiveness and wipe out around $18 million. 

The total debts across the group sit around $655 million.

There are future costs, including clean-up that is estimated to be around $428 million, which have to be taken into account for when the mine closes, possibly in 2040. 

The company said it has bonds, trust funds and cash collateral totalling several hundred million dollars toward the clean-up.

Meanwhile, the Northwest Territories government made a payment of around $2 million in November, to help keep Ekati afloat. The documents show the government covered interest costs on a short-term bridge loan — provided by a group of private lenders — while waiting on the federal government’s $175 million emergency funding.  

The document also shows the federal government funding came in two stages, with riders attached. 

In December, the company was given $115 million. But for it to receive the rest of the $60 million, it was required to raise at least $25 million in new equity investment by Friday — the same day it filed for creditor protection. The documents do not detail if that amount was raised.

Global factors affecting Canadian diamonds

In the filing, the company blamed the collapse on various global factors, beginning with the price of the precious stones per carat.

It said diamond prices were in free fall, dropping from around $125 per carat at the end of 2024 to around $33 by December 2025. That’s a fall of about 74 per cent.

“The factors impacting diamond prices include the emergence of lab-grown alternatives, decline in purchases from China, and tariff-related impacts,” said Brent Mierau, corporate secretary and financial head of Arctic Canadian Diamond Company, in the 36-page affidavit. 

The documents show the company brought in more than $600 million in diamond sales in 2024. By the following year that number had fallen to about $253 million.