Rio Tinto offers early termination to Diavik diamond workers in Northwest Territories: report

Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO) is offering early termination for employees at its Diavik diamond mine, Canada’s largest gem producer, as part of cost savings ahead of planned closure in 2026, according to gem marketer Rapaport.

Diavik, in the Northwest Territories about 200 km south of the Arctic Circle, produces 6-7 million carats a year and employs more than 1,000 people as an integral part of the local economy. Output since the mine started in 2003 is estimated at 90-100 million carats. 

Matthew Breen, chief operating officer at Diavik, confirmed Rio’s plans to Rapaport’s news unit on Tuesday. It’s a response to challenges facing the diamond industry, he said. 

While the diamond mine is slated to close in the first quarter of 2026, owner Rio Tinto previously indicated that some workers will remain at the site until 2029 to support the closure and reclamation process.

Industry challenges

The diamond and gems industry is up against slowing demand for luxury goods in China, the United States and elsewhere after inflation dampened consumer spending, causing some oversupplies. The growth of lab-grown diamonds is denting the market because they’re less expensive to produce and marketed as more environmentally friendly, especially appealing to younger, sustainability-conscious consumers.

There are also concerns about diamond market transparency when pariah Russia is the world’s leading producer of natural stones by volume. 

Elsewhere in the Northwest Territories, the Gahcho Kué mine operated by Anglo American (LSE: AAL) unit De Beers, is expected to follow Diavik and close around 2030. Anglo has said it plans to spin off or sell De Beers. 

A report earlier this year shared by research firm Impact Economics estimates that these diamond mine closures in the territory could result in 1,500 job losses lost about 1,100 residents leaving.