Canada’s diamond industry begins a long goodbye

{"text":[[{"start":8.3,"text":"On a frozen lake, 200km south of the Arctic Circle, Alan Butler walks past a sign that says “Portal” and descends deep into another world to search for diamonds."}],[{"start":21.5,"text":"“This is the most extreme place I’ve ever worked,” said the 67-year-old drill operator. “Working in -50°C is a whole different game. You have to be truly prepared.”"}],[{"start":33.15,"text":"His descent marked the final shift for Rio Tinto’s Diavik mine in the icy tundra of Canada’s Northwest Territories. Over 23 years, the pit produced 150mn carats and billions in revenue, but its reserves are now exhausted."}],[{"start":50.25,"text":"Its closure heralded the beginning of the end for an industry that has been a lifeline to NWT’s 46,000 people, about half of whom are Indigenous. Until recently, it employed some 3,000 people."}],[{"start":null,"text":"

• Alan Butler wearing an orange coverall and blue helmet stands indoors at the Diavik mine on his last shift, with another worker in similar attire seated in the background.
• A worker in orange safety gear and a helmet climbs a metal ladder inside a narrow tunnel at the Diavik mine.

"}],[{"start":64.1,"text":"But NWT’s diamond sector, which grew from nothing in the late 1990s to become the world’s third largest, faces an existential crisis as collapsing global prices shatter the cliché that diamonds are forever."}],[{"start":78.14999999999999,"text":"The gems have fallen out of fashion among younger generations while lab-grown replicas, mostly produced in China and India, become increasingly popular. US tariffs on diamond-processing hubs Belgium and India have added extra costs. "}],[{"start":92.99999999999999,"text":"The fall in prices has “impacted global diamond mine economics”, said analyst Paul Zimnisky. “It’s hard to overstate how much diamond supply has come down in recent years,” he said, estimating that natural production will soon hit its lowest level since the late 1980s. "}],[{"start":110.35,"text":"WWW International Diamond Consultants’ rough diamond price index is down 51 per cent from the record highs of 2022."}],[{"start":119,"text":"Over the past two years, Rio Tinto’s company’s global diamond unit lost nearly $200mn. It is no longer a core business for the company. "}],[{"start":127.9,"text":"“The market environment has been very challenging,” said Sophie Bergeron, Rio Tinto’s iron, titanium and diamonds managing director."}],[{"start":null,"text":""}],[{"start":135.8,"text":"And now NWT’s three large diamond mines — which provide about one-fifth of the territory’s GDP — are hitting the end of their lifespans."}],[{"start":144.15,"text":"Diavik’s neighbouring Ekati mine is due to shut in 2029, and has needed C$175mn in federal government loans to keep it from bankruptcy. "}],[{"start":154.75,"text":"Nearby Gahcho Kué, 51 per cent owned by De Beers, is set to close in 2031. De Beers said in February it was holding redundancy talks with about 5 per cent of the mine’s employees, as it paused expansion plans for Gahcho Kué given “current market conditions”."}],[{"start":172.1,"text":"De Beers owner Anglo American is trying to sell its diamonds unit, one of the world’s most famous and valuable precious stones businesses. It received initial bids this month after writing down its value three times in the past three years."}],[{"start":186.75,"text":"NWT has seen mining riches come and go once before: a gold rush at the turn of the 20th century brought work and development, before dying out as the decades wore on."}],[{"start":198.5,"text":"Now, tough times are ahead, said Tłı̨chǫ Grand Chief Jackson Lafferty, one of Diavik’s five principal Indigenous partners. "}],[{"start":206.7,"text":"“We had the gold rush then the diamond rush, so what’s next?” he asked."}],[{"start":null,"text":"

• A hand holds a clear jar labeled “Rio Tinto Diavik Diamond Mine” filled with rough stones.
• A large, rough yellow diamond with a textured surface, weighing 158.20 carats, displayed against a blue background.

"}],[{"start":211.5,"text":"Local economist Graeme Clinton said more than 1,500 jobs could ultimately be lost, and about 1,100 residents may leave NWT to find work elsewhere, causing about $100mn less in consumer spending every year."}],[{"start":226.85,"text":"“That’s a huge hit for a small town like Yellowknife,” said Clinton."}],[{"start":230.7,"text":"The region’s government “really dropped the ball” on preparing for the end of the diamond mines, said Pierre Gratton, the Mining Association of Canada president. “Industry has been telling the NWT government for years, the closure is coming. They are facing a tough future and it didn’t have to be this way.”"}],[{"start":248.2,"text":"The NWT government’s “boom and bust” mentality has failed to diversify the region’s economy, said Jamie Kneen of MiningWatch Canada, a non-profit mining industry watchdog."}],[{"start":259.25,"text":"“The investors and financiers got a lot more out of the mines than the communities, the Territory and the federal government combined,” he said."}],[{"start":null,"text":"

• A group of people in safety vests and goggles stand in a line holding hand drums, performing at a Diavik Diamond Mine event indoors
• Matt Breen points to a detailed illustrated timeline of the Diavik Diamond Mine’s closure and reclamation process.

"}],[{"start":267,"text":"Rebecca Hall, a political scientist at Queen’s University, said when working in Yellowknife she saw first-hand how “fly-in fly-out” mining cycles exacerbated economic inequalities, calling it a case of “more money, more problems”."}],[{"start":282.35,"text":"“Definitely, it has been a real challenge for some,” she said."}],[{"start":286.5,"text":"But NWT premier RJ Simpson defended his record, saying the region has been weighed down by “intergenerational trauma” from a long history of horrific government abuses against Canada’s Indigenous communities, which has led to endemic crime, substance abuse and poverty."}],[{"start":303.95,"text":"“I wouldn’t say we squandered the mine’s revenue because if we had twice as much money, we would still be struggling to address those issues,” he said. "}],[{"start":null,"text":"

• Workers in green hard hats and orange safety vests sit and stand during the Diavik mine closing ceremony.
• A utility truck with a driver wearing a hard hat parked inside an underground mine tunnel, illuminated by orange lights.

"}],[{"start":312.45,"text":"Rio contends it has contributed more than C$8bn to the NWT economy since 2000. It says more than C$4bn went to Indigenous contractors such as Det’on Cho Group of Companies, owned by the Yellowknives Dene First Nation, that has grown into 31 companies overseeing about C$90mn in annual revenue."}],[{"start":333.2,"text":"Grand Chief Lafferty, who spent seven years working for Rio, said it had been a “good corporate citizen”, bringing jobs, training and business opportunities."}],[{"start":343.3,"text":"Lafferty, who represents 4,000 people in the area around Diavik, and others are looking at more mining to keep their people afloat, aiming to tap the region’s critical mineral deposits as western countries look to reduce their supply chain dependence on China. The Tłı̨chǫ have signed a tentative agreement for a lithium project with Australian company Fortescue, founded by billionaire Andrew “Twiggy” Forrest, Lafferty said."}],[{"start":366.75,"text":"Simpson, however, is hoping Prime Minister Mark Carney’s plan to spend C$35bn on Arctic defence will revolutionise the region’s economy. It will be “a huge ticket item for us, a huge benefit and economic boost”, potentially bringing new ports, roads and runways."}],[{"start":385.8,"text":"In the meantime, Rio will keep employing large numbers of people as it refills the diamond pits with fresh water and cleans up the land. "}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":393.65000000000003,"text":"Mining has irreversibly disrupted the migration of many caribou — what Europeans call reindeer — and the local Bathurst herd has “been pushed towards extinction”, said Elie Gurarie of the State University of New York."}],[{"start":407.35,"text":"Rio, which has been linked to ecological and sociocultural disasters in Australia, Madagascar and Bougainville, says it is changing its ways."}],[{"start":417.05,"text":"“We are trying to be better,” said Matt Breen, Diavik’s chief operating officer. “We want to return the land to the people who have used it before and the people who will use it in the future.”"}],[{"start":430.55,"text":"The region is already grappling with 237,000 tonnes of arsenic trioxide left behind by the Giant gold mine, whose US$3.2bn clean-up will not be finished until 2038."}],[{"start":442.90000000000003,"text":"Rio has posted a $200mn financial guarantee with the NWT government to ensure it meets its environmental obligations. And its “My Path” programme helped workers transition into new jobs, but some of them remain sanguine about the future. "}],[{"start":459.15000000000003,"text":"Nathan Marlowe, a 35-year-old from the Łutselkʼe First Nations who worked at Diavik for 15 years, said he looked forward to more time hunting, fishing and watching ice hockey."}],[{"start":471.15000000000003,"text":"“I liked this job,” he said, “but mostly for the cash.” "}],[{"start":475.00000000000006,"text":"Additional reporting and data visualisation by Camilla Hodgson"}],[{"start":486.25000000000006,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1777770731_2004.mp3"}