Part owners of Gahcho Kué lose $263 million in 2020

The Gahcho Kué diamond mine located 280 kilometers northeast of Yellowknife. (Supplied by DeBeers Canada.)
- Advertisement -

Mountain Province Diamond company, who partially owns Gahcho Kué, reported net losses of $263 million in 2020.

That’s nearly double the figure from 2019, when the company posted losses totalling $129 million.

“2020 was a challenging year for the Company and Gahcho Kué Mine, with pandemic-related personnel shortages and an inability to trade in the rough markets due to global lock-downs driving our underperformance,” the company said in a statement.

The company saw an uptick in sales in December, with sales in the fourth quarter of 2020 outpacing sales in 2019. 

- Advertisement -

However, the income from sales as a whole for 2020 were down compared to 2019.

The company sold 3,329,000 carats of diamonds in 2020, more than the 3,284,000 they sold in 2019, but they sold for less money. 

The company made $226,993,000 from diamond sales in 2020, compared with $276,334,000 in 2019, as diamond prices dropped to $60 per carat compared with $80 per carat in 2019 during the fourth quarter.

“While rough markets opened up at the end of the third quarter, challenges with production continued into early 2021, compounded by a COVID-19 outbreak that forced a 3-week operational stand-down in February, further impacting our ability to mine and recover diamonds,” Mountain Province said in a statement. 

Gahcho Kué shut down for three weeks in February, with many workers being sent home, after an outbreak of COVID-19 was reported at the mine site.

- Advertisement -

“The uncertainty and fluid nature of the COVID-19 pandemic and the ongoing impacts to production as we restart the mine are hampering our plans to address the resultant production shortfalls,” Mountain Province said in a statement.

“We are working with De Beers Canada to ensure that we can recover the lost carats with increased plant throughput throughout the remainder of the year,” the company added.

Mountain Province Diamonds owns 49 per cent of the Gahcho Kué diamond mine with De Beers Canada owning the other half.

The losses for Mountain Province are part of a trend of decline in the NWT’s diamond mines, which are past their peak, according to a report from Canadian Northern Economic Development Agency.

- Advertisement -