HomeDiamonds & GemstonesRio Tinto raises diamond prices

Rio Tinto raises diamond prices

Rio Tinto and BHP
Billiton may combine
their Canadian diamond
London, England — MININGREVIEW.COM — 15 October 2009 – The Rio Tinto Group “’ the third-largest diamond producer in the world “’ has raised prices for the gems it mines in Canada by 15% in the wake of improved demand last month.

“The increase from the prior month was for diamonds from Rio’s 60%-owned Diavik mine, said chief executive officer for diamonds, copper and nickel Bret Clayton here in an interview with Reuters. “While retail diamond sales fell by about a third during the world financial crisis, sales by mining companies slumped as much as 70% as wholesalers used up their stockpiles,” he added.

“We’re seeing demand starting to pick up,” Clayton said. “The supply chain is now de-stocked, so we are starting to see some pull-through in demand for diamonds.”

The price rebound follows an easing in the global economic slump that slashed demand for luxury goods and profits at ZAO Alrosa, Rio and De Beers “’ the largest producer of the gems. All three companies have re-started mines and processing capacity in the past four months in anticipation of a recovery in the U.S. and growing jewellery demand in China and India.

Rough, or uncut, diamond prices are rebounding after falling as much as 65% from September last year through to March, according to Ambrian Partners Limited.

Rio, which operates the Argyle mine in Western Australia, is studying projects in the Democratic Republic of Congo and India, according to the company’s exploration chief, Eric Finlayson.

Clayton declined to comment on reports that Rio and BHP Billiton Limited “’ the world’s biggest mining company “’ may combine Canadian diamond operations. “Rio regularly talks on saving money with BHP and De Beers, which also operates in the country,” he said.