Shear Diamonds is suspending production at its Jericho Diamond mine in Nunavut for now.

The company says world diamond market prices have dropped so sharply that it can no longer break even.

Tom Hoefer, the executive director of the NWT and Nunavut Chamber of Mines, said that just because prices are low now, doesn't mean they will remain that way.

"When you look at the diamond fundamentals, everybody is predicting there's going to be much stronger diamond markets in the future. The reason being is there's not a lot of new mines coming in to production but there has been increasing demand, especially from China."

Shear Diamonds is not walking away from Jericho Diamond mine - it will continue to explore the Nunavut property until diamond prices improve.

The mine opened in 2006.