N.W.T. gov't raises concerns after Gahcho Kué expansion is paused

The Government of the Northwest Territories says the pause of a planned expansion at the Gahcho Kué diamond mine highlights growing economic risks facing the territory’s diamond sector.

In a corporate update Monday, Mountain Province Diamonds — which owns 49 per cent of the mine in a joint venture with De Beers — announced that the partners are pausing development of the Tuzo Phase 3 project, citing current market conditions.

The Tuzo project is the development of a diamond-bearing kimberlite pipe that would extend mine life. The company said the decision will not affect 2026 production levels, as operations will continue to focus on existing mining areas. And to further save money, the company will not appoint a new CEO following the departure of its current one.

Responding to the announcement, N.W.T. Industry Minister Caitlin Cleveland said in a statement the decision is “serious news” for the territory, saying the mine is a major employer and economic driver.

She said "the mine is not closing immediately" and "near-term impacts are expected to be limited," but the development reflects ongoing weakness in global diamond markets marked by lower prices and higher operating costs.

Cleveland said it further shows the danger of the N.W.T. economy being overly reliant on one economic sector.

"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 said. "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."

Mountain Province Diamonds also said it has received joint-venture funding notices from De Beers of about $49 million, with the first payment — roughly $38.8 million — due March 17, and the remaining balance payable in installments thereafter. The company said it expects proceeds from upcoming diamond sales may help cover the initial payment, while discussions with De Beers continue.

Cleveland said the territorial government will ensure worker and business supports are available if employment impacts occur and expects employers to meet labour-standards obligations.

Cleveland said the territorial government will ensure worker and business supports are available if there are employment impacts and she said they expect employers to meet labour standards obligations.