https://www.miningweekly.com
Business|Copper|Diamonds|Exploration|Iron Ore
Business|Copper|Diamonds|Exploration|Iron Ore
business|copper|diamonds|exploration|iron-ore

Rio Tinto sees rosy future for diamonds despite end of Argyle

26th September 2019

By: Reuters

  

Font size: - +

LONDON - Rio Tinto is exploring for diamonds in Canada as part of its plans to stay in the sector despite the looming closure of its Argyle mine in Australia, known for extremely rare pink diamonds, the firm's head of copper and diamonds said.

Demand and prices for the wider market have fallen as concerns mount about the world economy, and laboratory-grown gems have added to supply.

Coloured or particularly large diamonds, however, have held value, especially pink diamonds, 90% of which are produced by Argyle. That mine, the world's biggest in carat terms, is expected to cease production by the end of next year.

Arnaud Soirat, Rio's chief executive for copper and diamonds, said pink diamonds had risen in price by 500% since 2000. He gave no figures for the overall market, but producers have reported lower overall demand and prices.

Despite the overall bearish backdrop, Soirat said Rio Tinto planned to stay in diamonds.

"Diamonds is a business we like a lot. It's a very high-margin business in line with our strategy of value over volume. It makes a lot of sense. We want to stay in the diamonds business," Soirat said in an interview.

Rio is exploring in Canada, where it has a 60% interest in and operates the Diavik Diamond Mine.

It also has a joint venture with Canada's Star Diamond Corp .

Rio declines to give separate figures for diamonds but last year's total exploration spend was $488-million.

Its gross diamond sales in 2018 raised $695 million and delivered net earnings of $118-million, compared with group core profits, dominated by iron-ore, of $18-billion.

Soirat said each pink carat could be worth several million dollars.

He is overseeing one of the last sealed bid tenders, which offers 64 Argyle pink diamonds and closes on October 9, following showings to potential buyers in London, New York and Perth, Australia. Soirat said there could be two more tenders depending on Argyle's production in its final months.

The pink diamond tenders have been held annually since 1984.

Diamond specialists say the pink colour is thought to be created by a twist within the atomic lattice during formation more than a billion years ago.

Other diamond miners, which have long excelled at marketing, are chasing margins. The world's biggest producer by volume, Alrosa, which also has some pink stones, is marketing naturally occurring fluorescent diamonds.

Rebecca Foerster, president of Alrosa in the United States, the world's leading diamond market, said Argyle's closure should boost the price of pink stones and help Alrosa achieve "a significant market share of coloured diamonds", adding that the impact on the overall diamond market would be limited.

Edited by Reuters

Comments

Showroom

SMS group
SMS group

At SMS group, we have made it our mission to create a carbon-neutral and sustainable metals industry.

VISIT SHOWROOM 
John Deere (Pty) Ltd
John Deere (Pty) Ltd

In 1958 John Deere Construction made its first introduction to the industry with their model 64 bulldozer.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.118 0.153s - 89pq - 2rq
Subscribe Now