Australian mining company Burgundy Diamond Mines has suspended operations at its Point Lake diamond mine in Canada, attributing the decision to record-low diamond prices.

The Point Lake site, part of the company's Ekati mine in the Northwest Territories (NWT), will see several hundred employees and contractors laid off as a result.

Burgundy Diamonds corporate communications manager Ariella Calin said: "Burgundy Diamond Mines made the decision to temporarily suspend open-pit mining at Point Lake, which constitutes a shift from surface mining operations in the short term.”

Despite the suspension at Point Lake, mining operations at the Misery underground mine remain unaffected, with production rates showing significant improvement in recent months through improved mining techniques and equipment.

Burgundy is expected to provide a quarterly production update towards the end of July.

The company said in a statement: “The company will continue to maintain Point Lake to ensure that it can quickly and efficiently restart operations, should market conditions allow.”

The global dip in diamond prices has led to reduced profitability across the sector, prompting companies such as Rio Tinto and Anglo American to consider closures and spin-offs of their diamond businesses.

Rio Tinto plans to close its Diavik mine by early 2026, while Anglo American, owner of De Beers, is exploring the option to divest its entire diamond segment.

In May, De Beers Group announced plans to discontinue its lab-grown diamond jewellery brand Lightbox and focus on natural diamonds in the jewellery sector.

In response to the challenging market conditions, Burgundy has ceased trading on the Australian Stock Exchange pending further operational updates, reported Reuters.

The company is prioritising the mining and processing of higher-margin ore at Ekati to reduce costs.

As the productive life of Canada's diamond mines draws to a close, the NWT community is advocating for infrastructure improvements and new projects to mitigate future job losses.

NWT & Nunavut Chamber of Mines executive director Karen D. Costello said: "The Northern mining industry has been around for over 90 years.

"And it has been recognised that we do have incredible mineral potential, but we do need robust exploration to make the discoveries, and we do need the known projects to advance to become the next generation of mines."