This week, the Northwest Territories saw 51 people from the Diavik diamond mine laid off across the business.
In hindsight, we should have seen this coming.
That’s according to Tom Hoefer, executive director of the NWT & Nunavut Chamber of Mines. At first he was surprised by the layoffs, but now he says they were hardly unexpected given such a ‘fragile’ marketplace.
“I think it’s a reflection of the market conditions that we’re facing,” said Hoefer.
“For the last few years we’ve seen a decline in diamond prices and you can only hold on for so long in that kind of a marketplace without taking actions.”
Diamond prices have been down about 20 per cent in the past few years according to Hoefer, but recently he says prices have been trending upwards.
“[The marketplace] isn’t robust, it isn’t showing a decidedly positive change in direction, so we’re optimistic that it’s going to change but in the meantime companies have to take actions.”
Actions like layoffs.
“Mines have to constantly be thinking about their bottom line, and so they have to take actions to address their costs if they can’t change the price,” Hoefer said.
“That means finding technological changes that make improvements, and the worst case is having to lay people off to reduce cost. I hate to see that happen [but] sometimes it’s a necessary move.”
Latest blow to the industry
The layoffs at Diavik mark yet another blow to the territory’s resource-dependent economy.
Hoefer is hopeful things will turn around soon.
“It’s pretty hard to predict the future, and miners are always optimistic so we’re hopeful that things will change,” he said.
“If we can get more investment up here and start looking for more mines that would be great, but we need to be taking steps to do that too. Let’s hope we don’t see more changes.”
Things ‘could have been worse’
Globally, the diamond industry has seen many hits like this. But compared to other countries and provinces, Hoefer says the situation in Canada’s North isn’t quite as dire.
“The whole industry globally has seen lots of hits like this with people being laid off,” he said.
“We’ve kind of escaped a lot of the big ones so hopefully this will be the end of it. It could have been worse.”