Burgundy Diamond Mines lays off ‘hundreds’ in | Australian Markets
Perth-based Burgundy Diamond Mines has laid off tons of of employees at its flagship Canadian mine, barely two years after taking up the previous BHP project.
ASX-listed Burgundy blamed weak costs for the layoffs on the Ekati mine in Canada’s Arctic Circle, which was introduced into manufacturing by BHP in 1998 and purchased by the junior for $US136m ($209m) in 2023.
The company stated on the time that the acquisition elevated it into the massive league in diamonds, with government chairman and main shareholder Michael O’Keefe describing it as a “genuine game-changer”.
However, Burgundy advised buyers on Friday it had suspended its Point Lake open pit mine at Ekati, 2km from the primary Misery underground mine after report low diamond costs made the operation unviable.
The company stated the closure was “temporary”, nevertheless it had been pressured into layoffs — reported as in “the hundreds” — from the Burgundy workforce and mine contractors.
Burgundy advised buyers that after analysing latest samples taken from the kimberlite pipe at Point Lake, “regrettably in the current depressed diamond price environment, the Point Lake operation is sub-economic”.
“Accordingly, Burgundy has made the decision to temporarily suspend open pit mining at Point Lake, which constitutes a shift from surface mining in the short term.
“This has necessitated the layoff of some employees and the reduction of contractors mobilised to Point Lake.”
Burgundy would look to “quickly and efficiently restart operations, should market conditions allow”, it stated.
The diamond industry is combating a main droop, with costs battered by falling demand from China, competitors from artificial, stones and uncertainty round US tariffs.
Burgundy shares closed half a cent decrease at 3.4¢, valuing the group at simply $48.3m. That compares to the 25¢ a share at which the company raised the funds to buy Ekati in mid-2023.
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