HomeDiamonds & GemstonesRio Tinto resumes work on Argyle diamond mine

Rio Tinto resumes work on Argyle diamond mine

The underground block-
cave project at the Argyle
diamond mine
 
Perth, Australia — MININGREVIEW.COM — 14 September 2009 – Rio Tinto Group “’ the world’s third- largest mining company “’ will resume work on the US$1.5 billion (R12 billion) expansion of its Argyle diamond mine in Australia next year, as global jewellery demand recovers.
 
“Underground production at the world’s largest diamond mine should start in 2013, Argyle COO Kevin McLeish told Bloomberg News in an interview from Perth. Work on the expansion was slowed to a minimum in January.
 
Bloomberg reports that diamond prices are rebounding after a slump that slashed profits at ZAO Alrosa, London-based Rio and De Beers. All three producers have restarted mines and processing capacity in the past three months in anticipation of economic recovery in the U.S. and growing jewellery demand in China and India.

“There are some positive signs of recovery,” McLeish said. “Given the price and recovery forecast, we will see a significant improvement in the performance of the diamond group within Rio through 2010.”

Diamonds and copper accounted for 32% of Rio’s operating income last year. Hiring for the expansion will commence in the second half of next year, McLeish said.

Output from the Argyle mine slumped 86% in the June quarter from a year ago to 408 000 carats because of the shutdown in processing facilities from January to June. The mine is now operating at full capacity of 8 million metric tonnes a year, McLeish said. Argyle, in Western Australia’s east Kimberley region, normally accounts for about 20% of annual global diamond output, according to Rio.

Rio’s Argyle mine supplies 90 percent of the world’s pink diamonds, used exclusively for jewellery. Those gems account for just 1% of total production at the mine. Much of the remainder is sold as rough, or uncut, diamonds.

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