Canadian Manufacturing

De Beers to idle Snap Lake diamond mine in N.W.T., eliminating 434 jobs

Weaker gemstone market leads to major job losses outside Yellowknife

December 7, 2015  by John Cotter, The Canadian Press

De Beers will close its Snap Lake diamond mine in 220 kilometres northeast of Yellowknife, N.W.T. PHOTO: De Beers

De Beers will close its Snap Lake diamond mine 220 kilometres northeast of Yellowknife, N.W.T. PHOTO: De Beers

YELLOWKNIFE—The De Beers Group is shutting down its Snap Lake diamond mine in the Northwest Territories due to a softening market for the gemstone, resulting in the loss of more than 400 jobs.

Kim Truter, CEO of De Beers Canada, said the company will evaluate market conditions over the next year to determine if the underground mine is financially viable.

“The men and women at Snap Lake have put enormous effort into this challenging ore body over many years, but even the gains made this year are not enough to overcome the market conditions and put us in a profitable position,” Truter said in a news release Friday.

De Beers said some employees will be required in the coming months to prepare the mine for a lengthy suspension.


Truter said 434 employees have been notified that they aren’t required for the closure and maintenance work.

N.W.T. Premier Bob McLeod said the announcement by De Beers will have a significant impact on the region’s economy.

“Our priority is the individuals and their families who are directly affected by this decision and the impacts that this decision will have on N.W.T. business owners and our communities,” he said.

McLeod said about 300 people who work at the mine about 220 kilometres northeast of Yellowknife live in the territory. The others fly in from other parts of Canada.

He said De Beers Canada has spent $1.5 billion with N.W.T. companies over the years, including $865 million with aboriginal firms and joint ventures.

“These are not amounts that are easily replaced,” he said.

McLeod said he hoped the closure of the mine is temporary and noted that De Beers is involved in another mine called the Gacho Kue project that is almost complete.

The Tlicho government also issued a news release Friday saying it is concerned for the laid-off mine workers and their families.

“This is a very sad day for our N.W.T. people and economy, not only for the Tlicho but for everyone,” said Grand Chief Edward Erasmus. “Sometimes tough business decisions have to be made, and we understand that De Beers had to make that decision today.

“We will be working closely with our businesses and with workers to lessen the impact on our people. We know that De Beers is working hard to make sure there is counselling available for workers.”

Tom Hoefer, executive director of the N.W.T. and Nunavut Chamber of Mines, said De Beers has been spending almost $200 million a year in local businesses plus all of the wages they pay for the workforce.

The chamber estimates that De Beers and other businesses have spent more than $2.2 billion over the years on the mine, which began operating in 2008.

Three diamond mines including Snap Lake contribute about 40 per cent of the N.W.T.’s gross domestic product and together are the single largest private sector contributor to its economy.

The chamber estimates that 17 per cent of the mine’s workforce last year was aboriginal.

Hoefer said the state of the diamond mining industry should be on the new government’s agenda.

The territory held a general election on Nov. 23 but won’t select a new premier or cabinet until later this month.

The chamber said the diamond mining industry around the world is facing significant challenges this year, including low prices.

De Beers says it is the world’s largest diamond producer with other mines in Botswana, Namibia and South Africa.