De Beers has begun talks with employees at the Gahcho Kué diamond mine in the Northwest Territories regarding potential job cuts after the company halted development of the Tuzo Phase 3 expansion project.

The company says about five per cent of the mine’s workforce is affected and that it is focusing on limiting impacts on N.W.T.-resident employees.

Gahcho Kué, a joint venture between De Beers and Mountain Province, employs roughly 500 people, according to Mountain Province’s website.

In a statement to CBC News, De Beers said the pause in expansion reflects current market conditions and that operational needs will continue to be reviewed as global events shape the industry.

“These decisions are not being taken lightly because we have a terrific team who have delivered strong safety and operational performance, especially over the past two years,” said spokesperson Terry Kruger.

Karen Costello, executive director of the N.W.T. and Nunavut Chamber of Mines, said redundancies are not unusual when commodity prices weaken. She noted that the territory’s reliance on diamond mining intensifies the effects of price volatility. While it is unclear whether local or non-local employees will be affected, she said any reduction is “significant” for those losing their jobs.

Costello added that greater diversification, particularly in gold and critical minerals, could help stabilize the region’s mining sector.

Gahcho Kué, located about 300 kilometres northeast of Yellowknife, opened in 2016 and is expected to close in 2031. It is De Beers’s only active Canadian mine following the closure of the Victor and Snap Lake operations.