Sourcing

Operator of Ekati Diamond Mine Granted Insolvency Protection

SourcingApr 24, 2020

Operator of Ekati Diamond Mine Granted Insolvency Protection

Dominion Diamond Mines also has a 40 percent stake in the Diavik mine.

2016_Ekati-Main-Camp.jpg
A file photo of the main camp at the Ekati Diamond Mine. The mine’s owner, Dominion, filed for insolvency protection under the Companies’ Creditors Arrangement Act in Canada this week.

London—Dominion Diamond Mines announced Thursday it has filed for and was granted insolvency protection under the Companies’ Creditors Arrangement Act (CCAA) in Canada.

The CCAA is a federal act that allows financially troubled companies owing more than $5 million to creditors 30 days of protection to financially restructure while avoiding bankruptcy and allowing the creditors to receive some money.

Based in Calgary, Dominion owns the Ekati Diamond Mine and is the 40 percent JV partner in the Diavik Diamond Mine operated by Rio Tinto. Both mines are located in Canada’s Northwest Territories, less than 200 miles south of the Arctic Circle.

In a statement released Thursday, the company said the COVID-19 pandemic was the primary driver behind its filing.

It closed the Ekati mine fairly early on in response to the pandemic, shuttering operations there March 19, citing the disease’s rapid spread, the mine’s remote location and the high frequency of air travel required by staff.

Diavik, which is less than 20 miles from Ekati, is still fully operational, Rio Tinto confirmed.

“Although the company has strong diamond inventory, sorting houses and diamond markets are closed,” Dominion said. “These are key channels to facilitate the sale of the company’s inventory, so currently there is no ability to generate sufficient revenue to support Dominion’s ongoing financial obligations.”

The Washington Companies, which bought Dominion in 2017, offered to provide debtor-in-possession financing to provide it liquidity through the CCAA process in exchange for Dominion agreeing to a memorandum of understanding (MOU) regarding its possible sale to a Washington Companies affiliate as a stalking-horse bidder. Dominion would also be required to solicit other bids to either buy or invest in the company.

Dominion said whether or not it accepts The Washington Companies’ offer, it expects to obtain new financing, emerge from CCAA and reopen.

“As the spread of COVID-19 subsides and diamond markets reopen, Dominion plans to resume mining operations at the Ekati Diamond Mine and safely recall its furloughed workers,” it said. “Dominion continues to believe in the long-term viability of its assets and expects to emerge stronger and better able to deliver value to all stakeholders.”

Rio Tinto declined to comment directly on Dominion’s filing or its options when it comes to the Diavik mine, stating only: “Rio Tinto notes that Dominion Diamond Mines has filed for insolvency protection. Our focus remains on safely continuing our operations amidst the global COVID-19 pandemic.”


Three rough diamonds mined at Diavik and dubbed “Stars of the Arctic,”  the 178-carat “Vega” (left), the 25-carat “Capella,” and the “Altair” at 59 carats. Dominion Diamond Mines holds a 40 percent stake in Diavik.

The news about Dominion Diamond broke the same day De Beers’ parent company Anglo American released production results for the first quarter 2020 and its forecast for the year ahead.

Anglo cut production guidance for De Beers’ diamond mines from 32-34 million carats to 25-27 million carats, noting the drop-off in wholesale diamond trading and consumer traffic in key markets due to COVID-19.

These figures are subject to “continuous review based on the disruptions related to COVID-19 as well as the timing and scale of the recovery in trading conditions,” Anglo said.

In the first quarter 2020, coronavirus had limited impact on De Beers’ production, as shutdown and social distancing measures in producer countries didn’t take effect until the end of the quarter.

As of Friday, all De Beers’ mining operations that had been shuttered were ramping up to reopen.

Spokesman David Johnson said the company’s mines in Botswana and land operations in Namibia are returning to production at lower volumes, and the Venetia mine in South Africa is ramping up to 50 percent workforce.

Off-shore diamond mining in Namibia is operating at lower volumes, and the Gahcho Kué mine in Canada continues to operate but at lower volumes.

Rough diamond production in Q1 totaled 7.9 million carats, down 1 percent from 7.8 million carats a year ago.

Production was down in Botswana by 5 percent to 5.6 million carats, mainly because of work being done at the Orapa mine, and it dropped 19 percent year-over-year to 800,000 carats in Canada, which still had the Victor mine in the first quarter of last year.

In Namibia, diamond production was up 6 percent to 500,000 million carats and in South Africa, production increased 97 percent to 800,000 carats as De Beers mined the final ore from the open-pit Venetia mine—its only remaining mine in the country—before it is transitioned into an underground operation.
 
De Beers is spending $2 billion to take Venetia underground and expand its life into the 2040s.

Rough diamond sales in the first two rounds of sightholder and auction sales in 2020 were up 19 percent year-over-year, from 7.5 million carats to 8.9 million due to a weak Q1 in 2019.

But De Beers called off the third sight of 2020 as demand plummeted with the spread of COVID-19.

It allowed customers to defer all sight three allocations to later in the year.

Editor’s note: Information in this story about the ownership of the Diavik Diamond Mine was corrected post-publication. The mine is operated by Rio Tinto, not Dominion as previously stated.
Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.
tags:

The Latest

Saks on Amazon flagship window
MajorsMay 16, 2025
Saks Fifth Avenue, Amazon Partner on Luxury Online Storefront

Plus, parent company Saks Global announces plans to cut ties with up to 600 vendors.

Graphic for My Next Question webinar with guest Peter Smith
Recorded WebinarsMay 16, 2025
Watch: Physical Retail Is Not Dead

Peter Smith joined Michelle Graff to chat about the state of brick-and-mortar stores and share a few book and podcast recommendations.

Tejen Candy Bowl Torque Necklace
CollectionsMay 16, 2025
Piece of the Week: Tejen’s ‘Candy Bowl’ Torque Necklace

The necklace features a candy-colored Australian white opal in 18-karat Fairmined gold, as the brand was named a Fairmined ambassador.

antique_Vegas_2024_by_headshot_stories_9454.jpg
Brought to you by
Las Vegas Antique Jewelry & Watch Show: Showcasing the Most Collectible Merchandise from Across the Globe

Gain access to the most exclusive and coveted antique pieces from trusted dealers during Las Vegas Jewelry Week.

1 Camilla Dietz Bergeron.jpg
Supplier BulletinMay 15, 2025
Treasure Hunting at the Las Vegas Antique Jewelry and Watch Show

Sponsored by the Las Vegas Antique Jewelry and Watch Show

Weekly QuizMay 15, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
The Mediterranean Blue diamond
AuctionsMay 15, 2025
'The Mediterranean Blue' Diamond Sells for $21M at Sotheby’s

A private American collector purchased the 10-carat fancy vivid blue diamond.

Jessica McCormack Fruit Salad Campaign Imagery
CollectionsMay 15, 2025
Jessica McCormack’s ‘Fruit Salad’ Collection Is Fresh for Summer

The designer has taken the appeal of freshly picked fruit and channeled it into a capsule collection of earrings, necklaces, and pendants.

Supplier Spotlight -Recorded-Webinar.png
Brought to you by
Watch: The Winston Red: GIA Examines the Smithsonian’s Newest Addition

Supplier Spotlight Sponsored by GIA

Disability advocate Catarina Rivera, JVC ADA compliance guide, circle of hands wearing jewelry
Policies & IssuesMay 15, 2025
State of Retail: How to Better Serve Customers With Disabilities

Around 54 million Americans and counting live with a disability. Here’s how to make your jewelry store and website more accessible.

Sekou Andrews
Events & AwardsMay 15, 2025
Poet Sekou Andrews to Give Closing Keynote at Converge

The event is also accepting poster submissions now through June 16.

Pope Francis
Policies & IssuesMay 14, 2025
Here’s What Happened to Pope Francis’ Ring

Before Pope Leo XIV was elected, a centuries-old procedure regarding the late pontiff’s ring was followed.

1998 Cosmograph Daytona, Ref.16516 Rolex
AuctionsMay 14, 2025
Custom Rolex Pulled From Sotheby’s Sale

The one-of-a-kind platinum Rolex Cosmograph Daytona was estimated to fetch up to $1.7 million.

Jeweler Constance Polamalu at Bloomstone, a store that specializes in lab-grown diamonds
Lab-GrownMay 14, 2025
State of Diamonds: What’s Next for Lab-Grown Diamonds?

While the product has entrenched itself in the market, retailers and consultants are assessing the next phase of the category’s development.

Surveillance footage Tiffany & Co. Seattle robbery
CrimeMay 14, 2025
Seattle Detectives Seek Public’s Help in Tiffany & Co. Robberies

The police are trying to identify the man suspected of robbing two Tiffany & Co. locations in the area.

Jeff Corey, new chairperson of the board for the Jewelers Board of Trade
MajorsMay 14, 2025
Jeff Corey Elected Chair of JBT Board

The well-known Maine jeweler takes over for Brian Fleming and will serve a one-year term.

Foundrae Ingot Pendant
Policies & IssuesMay 14, 2025
Foundrae Donates $11K to Ethical Metalsmiths

The donation was the result of the brand’s annual Earth Day Ingot event.

Eiseman Jewels ribbon cutting ceremony
IndependentsMay 13, 2025
Eiseman Jewels’ Renovated Dallas Store Is Bigger and Better

Located in NorthPark Center, the revamped store is nearly 2,000 square feet larger and includes the first Tudor boutique in Dallas.

Diamond Council of America
MajorsMay 13, 2025
DCA Announces New Learning Platform, Course Updates

The nonprofit has made updates to the content in its beginner and advanced jewelry sales courses.

Malyia McNaughton and Elyssa Jenkins-Pérez
MajorsMay 13, 2025
BIJC Launches New Education Fund

BIJC President Malyia McNaughton will shift roles to lead the new foundation, and Elyssa Jenkins-Pérez will succeed her as president.

Harwell Godfrey Snake Giza Ring, Foundrae Mind, Body Soul Story Necklace, Tiffany & Co. Tiffany Titan By Pharrell Williams Bracelet
TrendsMay 13, 2025
State of Jewelry Design: The Top 10 Jewelry Trends of the Past Decade

As a nod to the theme of JCK Las Vegas 2025, “Decades,” National Jeweler took a look back at the top 10 jewelry trends of the past 10 years.

Lightbox’s Reminiscence Poet earrings in 14-karat white gold with lab-grown diamonds
Lab-GrownMay 12, 2025
Lightbox to Go Dark by Summer, De Beers Says

The company plans to halt all consumer-facing activity this summer, while Lightbox factory operations will cease by the end of the year.

Stock image of shipping containers
Policies & IssuesMay 12, 2025
Tariffs on Chinese Imports Temporarily Slashed as U.S.-China Reach Deal

Following weekend negotiations, the tax on Chinese goods imported into the United States will drop by 115 percent for the next 90 days.

Artists’ Jewelry: From Cubism to Pop, the Diane Venet Collection
Events & AwardsMay 12, 2025
Jewelry By Picasso, Dalí on Display at Florida Art Museum

“Artists’ Jewelry: From Cubism to Pop, the Diane Venet Collection” is on view at the Norton Museum of Art through October.

2025 CASE Award Submission Graphic
Events & AwardsMay 12, 2025
CASE Awards Now Accepting Entries For 2025

The deadline to submit is June 16.

Lugano Diamonds store in Greenwich, Connecticut
IndependentsMay 09, 2025
Lugano Diamonds CEO Resigns Amid Internal Investigation

Moti Ferder stepped down Wednesday and will not receive any severance pay, parent company Compass Diversified said.

Coeur Percé Scapular Necklace and Love Baby Locket
CollectionsMay 09, 2025
Pieces of the Week: Marie Lichtenberg’s Collaborations for Mother’s Day

Lichtenberg partnered with luxury platform Mytheresa on two designs honoring the connection between mothers and daughters.

Stock image of a man’s hands in handcuffs
CrimeMay 08, 2025
Former NYC Jewelry Store Employee Arrested in 2017 Choking Death of Boss

Michel Desalles allegedly murdered Omid Gholian inside World of Gold N Diamond using zip ties and then fled the country.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy