TORONTO (Reuters) -Junior miner Star Diamond Corp on Thursday said it objected to Rio Tinto's "predatory and coercive" actions after the global miner called a meeting for a joint venture the Canadian company says does not yet exist.
Rio Tinto responded by saying it "disagrees with Star Diamond’s interpretations in all material respects."
The companies have been in a long-running dispute over development of Star Diamond's Star-Orion South Diamond Project in the Canadian province of Saskatchewan.
In 2017, Star Diamond entered an earn-in agreement with Rio Tinto Exploration Canada Inc that gave the Anglo-Australian miner an option to earn up to a 60% interest in the project.
Saskatoon-based Star Diamond later said Rio overspent on the project while exercising its earn-in options before completing and delivering results from its bulk sampling program. It said Rio Tinto was trying to boost its stake at below market value.
Rio has spent roughly C$168 million to complete a 10-hole bulk sample program that Rio told Star Diamond would originally cost about C$18.5 million, the Canadian company said on Thursday.
"Rio Tinto now seeks to call a management committee meeting that it has no legal right to call for a joint venture that Rio Tinto knows has not been duly formed," Star Diamond said in a release.
A Rio Tinto spokesman said the miner has a right to call a meeting of the management committee and that Star Diamond’s latest attempt to prevent it from exercising that right was denied by a court on June 24.
A preliminary study in 2018 estimated 66 million carats of diamonds could be recovered from the C$2 billion Star-Orion project over a 38-year mine life.
Rio faced similar acrimony with its junior partner Turquoise Hill Resources over expansion of the pair's Oyu Tolgoi copper-gold mine in Mongolia, although that dispute was put to bed in April.
(Reporting by Jeff Lewis; Editing by David Gregorio and Paul Simao)
