Canada’s diamond industry is one of the youngest in this sector. Point Lake, the first commercial kimberlite pipe located in the Lac de Gras region of the Northwest Territories, was discovered in 1991 by geologists Charles Fipke and Stewart Blusson. This discovery sparked the largest mining ‘rush’ since the Yukon gold-rush era: by the mid-1990s, licenses for tens of millions of hectares of land had been issued in the province. Canada’s first diamond mine, Ekati, was commissioned in 1998, just seven years after the discovery of the diamond-bearing province; this is exceptionally fast for the mining industry.
By the mid-2000s, Canada was among the top three diamond-producing countries in the world by value of rough diamonds mined and, in some years, by volume. Provenance has become and remains the main competitive advantage of Canada’s rough diamonds due to a transparent supply chain, non-involvement in conflict zones, and reliable Kimberley Process certification. This basis has formed a distinct commercial image for Canada’s rough diamonds that was actively used by diamond cutters and polishers, as well as by jewelry retailers.
However, the Canadian diamond industry is currently experiencing difficult times. These could mark the end of the country’s first diamond cycle or, in a worst-case scenario, the demise of its entire diamond production. Of the four diamond mines operating during the 2010s, only Gahcho Kué continues to produce diamonds, and at prices almost half of those in 2025. Below, the current situation at operating and mothballed diamond mines is examined, as well as the status of the portfolio of projects that are at the development stage.
Operating mines
Rio Tinto announced the closure of the Diavik mine on March 26, 2026. Over 150 mn carats of rough diamonds were recovered at the mine over 23 years of its operation. The works on closure and rehabilitation of disturbed land will continue until 2029; the last rough diamond parcels will be available for sale through Rio Tinto’s international distribution network by the end of 2026 and beyond. A closure agreement with the Tłı̨chǫ First Nation was signed on February 26, 2026; this is one of the first agreements of that kind for Rio Tinto in Canada.
The situation at the Ekati mine is developing even more dramatically. In May 2026, Burgundy Diamond Mines operating the Ekati mine through its subsidiary Arctic Canadian Diamond, filed for bankruptcy protection under the Companies’ Creditors Arrangement Act (CCAA, a program designed to protect large companies from creditors with the possibility of debt restructuring). Supporting documents indicate that the company is unable to pay its bills amid a more than 70-percent year-over-year drop in rough diamond prices. A federal loan of C$175 mn received in 2025 failed to improve the situation, so the company, according to court documents, remains financially insolvent. Over 26 years of operation (since 1998), Ekati has produced approximately 100 mn carats of rough diamonds; several hundred jobs and the Arctic Canadian’s commitments to indigenous communities are at risk. The court upheld the company’s claim.
The Gahcho Kué mine in the Northwest Territories, a joint venture between De Beers Canada (51 percent) and Mountain Province Diamonds (49 percent), remains the only fully operational diamond mining enterprise in Canada. However, even at Gahcho Kué, the financial situation is rapidly degrading as in the first quarter of 2026, 858,200 carats of rough diamonds were sold for total proceeds of C$40 mn, or at an average realized price of C$47 per carat (approximately at US$34 per carat). In the first quarter of 2025, 426,300 carats were sold for C$44 mn, at an average of C$103, or US$72, per carat. The average selling price has more than halved year-over-year. In May 2026, Mountain Province sold the rights and its share in the future rough diamond proceeds worth nearly $1 mn to its majority shareholder, Dunebridge Worldwide, in exchange for upfront payments to be able to operate the business. However, before Dunebridge can receive the rough diamonds, Mountain Province must first repay its outstanding debt to its partner - according to the agreement, all proceeds from sales go directly to De Beers Canada.
Closed and mothballed mines
The most telling story of recent years has been the fate of the junior Stornoway Diamond Corporation’s Renard mine in the Province of Quebec. Stornoway commissioned the mine in mid-2016; in 2019, diamond production reached 1.8 mn carats, with the concentration plant’s design capacity being 2.2 mn tonnes of ore per year. Total capital investment in the project amounted to approximately C$946 mn. Stornoway previously filed for CCAA protection in September 2019, so following a restructuring, the company fell under control of its creditors, primarily Osisko Gold Royalties. The company filed for the CCAA protection for the second time in October 2023, when an aggregate debt of C$309 mn was listed as liabilities, including C$249 mn as a secured debt. The immediate pretext for filing the application was a two-month moratorium on rough diamond imports imposed by India, as the main buyers of the Renard’s products were located there.
In April 2024, Australia’s lithium company Winsome Resources received an option to purchase the mine for C$52 mn. The repurposing concept envisioned using the Renard’s concentration plant, infrastructure facilities, and tailings dump to process spodumene ore received from the Adina deposit located 60 km to the north. The agreement went through several rounds of restructuring: in August 2024, Winsome paid an additional C$2 mn to extend the option, and in January 2025, the initial payment upon exercising the option was reduced from C$15 mn to C$1 mn, with the bulk of the payments deferred to 2026 and 2027. In March 2025, the mine was officially placed on care and maintenance. Concurrently, in June 2025, Deloitte Restructuring Inc. acting as the court-appointed Monitor entered into an agreement with TCL Asset Group to sell off the mine’s surplus equipment, including the concentration plant and Tomra sorter. In July 2025, Winsome officially terminated the option agreement, citing declining prices for lithium and the overall macroeconomic environment. Auctions for the mine and underground equipment were held on September 3–4, 2025. As of May 2026, there were no public announcements regarding a new buyer for the mine or the site.
The Jericho mine in Nunavut is an example of an earlier, less obvious failure. Discovered in 1995, the diamond deposit was put into operation in 2006 by Tahera Diamond Corp., but operations were halted in 2008 as the 700,000 carats of rough diamonds produced proved insufficient to meet the initial expectations to recover 500,000 carats annually for eight years. In 2010, the license was transferred to Shear Diamonds Ltd. that started the restoration and simultaneously extracted diamonds from the tailings dumps. In 2012, Shear ceased its operations, leaving the mine without environmental site remediation and with a federal debt of approximately C$2 mn. The mine has been inactive since 2012.
Former De Beers mines that operated from 2008 to 2019 include Snap Lake in the Northwest Territories and Victor in Ontario. Active land restoration at both mining sites was completed in early 2025; the sites are currently undergoing long-term environmental monitoring. Totally, 16.1 mn carats of diamonds were produced at Snap Lake and Victor during their operations.
Projects at the development stage
Two potentially significant projects stand out in the existing portfolio of Canada’s rough diamond projects.
Star-Orion South in Saskatchewan remains the Star Diamond Corporation’s flagship project. In March 2024, Star Diamond completed the acquisition of Rio Tinto Exploration Canada’s 75-percent stake in the Fort à la Corne joint venture and became the sole owner of the asset. An updated indicated mineral resource estimate published in 2024 was 34.8 mn carats of rough diamonds at an average grade of 0.194 carats per tonne at the Star kimberlite pipe, and 36.9 mn carats at an average grade of 0.179 carats per tonne at the Orion South pipe. According to a 2018 preliminary economic assessment, 66 mn carats of diamonds could be produced at the deposit by open-pit mining over a 38-year period; capital expenditure was estimated at C$1.4 bn, the net present value (NPV) at a 7-percent discount rate was estimated at C$2 bn, and a 19-percent internal rate of return (IRR) was expected. A distinctive feature of the project’s rough diamonds is the predominance of type IIa stones that are highly pure, without boron impurities; such rough diamonds have not previously been found in significant quantities at any Canada’s mine. Star Diamond’s plans are to complete the Pre-Feasibility Study by the end of 2026, with construction expected to begin in three to five years. In April 2026, the company raised finance from Luxembourg-based Spirit Resources (controlled by Jean-Raymond Boulle): C$4 mn through a private offering (PO) and US$0.8 mn - through an unsecured interim loan. Star Diamond’s capitalization at the time of the revised estimating of resources was approximately C$39 mn; limited equity remains the main risk factor in assessing the project’s prospects.
The Chidliak project in Nunavut has been owned by De Beers Canada since 2018, when an Anglo American subsidiary acquired the Chidliak’s owner, Peregrine Diamonds Ltd. The kimberlite field comprises 74 kimberlite bodies; eight of them are recognized as economically prospective, including the CH-6 and CH-7 pipes having a combined estimated inferred resource of 22 mn carats of rough diamonds at an average grade of 1.8 carats per tonne of ore. In September 2022, De Beers submitted a project proposal to the Nunavut Environmental Review Board (NIRB); in February 2023, federal ministers confirmed the need for a full environmental review. The concept proposed by De Beers calls for a mobile modular concentration plant and low-carbon energy supply - hydro, wind, solar power generating facilities are being considered, as well as small modular nuclear reactors. The mine has an estimated lifespan of 16 years (2029 to 2045), with a target productivity of 1.2 mn carats per year. Key constraints include the conservation of caribou on the Hall Peninsula, traditional Inuit land management practices, and the Inuit community’s historical resistance to using the nuclear energy in the Arctic.
As a potential resource complement to the existing Gahcho Kue mine, Mountain Province Diamonds is developing the Kennady North project that includes the Kelvin and Faraday kimberlite pipes. Commercial development of these projects appears unlikely in the current price conditions, but they are considered a resource reserve.
Among the earlier-stage junior projects, it’s worth paying attention to the exploration of the Naujaat (formerly Qilalugaq) pipe by North Arrow Mineral in Nunavut known for discoveries of fancy-colored yellow diamonds; ongoing exploration by junior companies in the Lac de Gras region (potential satellite projects fulfilled by the previously operating Diavik and Ekati); and a number of mothballed projects in Alberta (Buffalo Hills) and Quebec. In the current pricing environment, all of these are on hold.
Reasons for the decline
The Canadian diamond sector has proven vulnerable to the combined effects of several independent factors. The first one is the collapse in natural rough diamond prices lasting since 2023. The main reasons are a liquidity shortage experienced by the Indian diamantaires and a two-month moratorium on rough diamond imports in 2023; the prolonged recovery in jewelry demand in China following the COVID-19 pandemic; and the rapid growth of the mid-price synthetic rough diamond segment in the U.S. market.
The second factor is the high cost of mining operations in the Arctic. The expenditures for fuel, logistics, winter road maintenance, and long operational downtimes throw Canadian mines off balance sooner than African mines. The third factor is the gradual depletion of the most productive kimberlite bodies, primarily at the Diavik, Snap Lake, and Victor deposits; no new discoveries of comparable scale have been made in Canada over the past decade and a half. The fourth factor is a crisis of investor confidence. Following the second Stornoway’s filing for CCAA protection and the Arctic Canadian’s bankruptcy filing, the raising of capital for Canada’s diamond projects has become significantly more difficult. Star Diamond that has one of the highest-quality assets in the world remains a typical example: it has virtually no equity capital, and raising even modest amounts of money requires extensive preparation and careful consideration.
Overall, the history of Canada’s rough diamonds is a single production cycle: a diamond deposit discovery in 1991, peak diamond production in the mid-2010s (approximately 23 mn carats per year), and a return to a single operating diamond mine by the late 2020s. Scenarios for the diamond industry’s revival do exist, but they are shifted beyond 2030 and depend on two conditions: confirmation of the Star-Orion South project’s economics following a pre-feasibility study under new diamond price conditions, and Anglo American’s willingness to allocate capital to the Chidliak project amid declining margins for the parent company. Both conditions are currently unmet.
The Canadian provenance of as a marketing asset will be supported by sales of the remaining rough diamond stocks at Diavik and Ghacho Kué for several more years: Rio Tinto is preparing to sell the final rough diamond parcels, and Mountain Province is maintaining its joint venture with De Beers. However, as an independent player in the global diamond industry, Canada goes to a narrow niche as a supplier of small volumes of high-quality rough diamonds with reliable certification of origin. The era started with Chuck Fipke and Stewart Blusson’s discovery of diamonds on the shores of one of the unremarkable lakes of the Canadian Shield is effectively coming to an end.
Anastasia Smolnikova, for Rough&Polished
