Stornoway Diamond says the decision is due to depressed market prices for diamonds stemming from the coronavirus pandemic.

The decision affects some 540 people at the Renard mine, 350 km north of Chibougamau, in the James Bay region of north-central Quebec.

A team of 50 workers will remain onsite during care and maintenance.

Stornoway was acquired by a group of its creditors, including Osisko Gold Royalties, and delisted last year after it failed to achieve free cash flow and ran out of working capital.

The mine continued to operate, however, until March 24, when the Quebec government suspending mining as a non-essential service due to the covid-19 pandemic.

This week, the province added mining operations to the list of essential businesses that are allowed to operate.

“The unprecedented global events we are experiencing have unfortunately led to the board of directors to take this difficult decision impacting our employees and a number of our valued stakeholders,” said Stornoway president and CEO Patrick Godin in a release.

“We thank all of them for their ongoing support throughout the Renard history. We will continue to monitor the market conditions for improvements, which would allow for a restart of mining activities. The diamond market has proven over time to be resilient and prices have recovered following economic downturns.”

While diamond prices started to pick up in early 2020 after a difficult 2019, the covid-19 pandemic and the responding virtual global economic shutdown have decimated the diamond sector.

Not only have diamond prices declined, but international travel bans have shut down sales of rough diamonds, depriving miners of revenue.