North

Industry minister says she'll 'put the pressure on' feds after Dominion files for creditor protection

Industry Minister Katrina Nokleby said Dominion Diamond Mines is 'optimistic' it will be able to bounce back, and the territorial government hopes that’s what will happen.

As for Dominion Diamond's future, the minister said she doesn't know much more than the public does

'It's not the best thing for us, that's for sure,' said Industry, Tourism and Investment Minister Katrina Nokleby about Dominion Diamond Mines filing for creditor protection. (Mario De Ciccio/Radio-Canada)

The Northwest Territories industry minister says she can't see further into the mining industry's future than most of the public can, but that this week's news that Dominion Diamond Mines filed for creditor protection is "not the best thing for us, that's for sure."

On Friday, Katrina Nokleby told Loren McGinnis on CBC's The Trailbreaker that Dominion is "optimistic" it will bounce back from financial hardships brought on in part by COVID-19, and that the territorial government hopes that's what will happen.

"However ... we are preparing for how the economy is going to be, and not just with the [mining] industry, but for everything with the Northwest Territories post-COVID[-19]," Nokleby added.

As the controlling owner of the Ekati Diamond Mine, and a 40 per cent partner in the territory's Diavik Diamond Mine, Dominion Diamond Mines is a major employer in the Northwest Territories. But the economic impact of COVID-19 made pre-existing financial stress at the company worse, and this week, it filed for and was granted creditor protection. 

Dominion suspended operations at Ekati on March 19 due to COVID-19.

"This does not mean that Dominion is going bankrupt. It doesn't mean that there's going to be receivership or that the site will completely shut down," said Nokleby. 

"As far as we've been told, it's business as usual. There's been liquidity freed up and they're going to continue with their care and maintenance." 

She said the company hopes that after restructuring, it will be able to continue mining diamonds in the territory.

Economic impact will be 'huge'

Nokleby estimated that 33 to 40 per cent of N.W.T.'s GDP comes from its three diamond mines.

"We can't even quantify the intangible, or the more social, benefits that we've received from the mines over the years."

She acknowledged that as the mines continue to suffer financial hardship, the impact on the territory's economy will be "huge." 

An aerial view of the Ekati Diamond Mine, 300 kilometres northeast of Yellowknife. Dominion suspended operations at Ekati on March 19 due to COVID-19. (Dominion Diamond Corporation)

As for Dominion's future specifically, the minister said she doesn't know much more than the public does

For now, Nokleby said, the government will continue lobbying Ottawa for money to help exploration and mining sectors, which have thus far been largely left out of the federal government's relief packages. 

Nokleby said problems at Dominion will have "huge ramifications" for contractors and businesses in the territory that work with the mines, "and of course, that's going to be a large part of our discussion now, with the federal government." 

"We're just going to continue to put the pressure on and let them know what our needs are," she said.

Mining industry 'very fragile'

While the N.W.T. wasn't given much notice that Dominion was filing for insolvency protection, Nokleby said the territorial government has long understood this to be a possibility. 

"The ongoing operation of the three diamond mines is very fragile. It has been fragile prior to COVID[-19]," she said. 

Everything is uncertain right now, said Nokleby. It's unclear when businesses will be able to open up, and when the territory will return to some semblance of normalcy.

"I don't have the answers at the moment," she said. "It's definitely going to be a challenging few months coming."

Written by Sidney Cohen based on an interview by Loren McGinnis

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