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Resurgent Rough Market Boosts Rio Tinto Revenue
Feb 7, 2018 4:33 AM
By Rapaport News
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RAPAPORT... Rio Tinto’s diamond revenue rose 15% to $706 million in 2017,
as global rough demand increased and Indian manufacturers replenished stock
following demonetization.
Profit in the diamond unit almost doubled over the previous year, climbing 96% to $92
million. Earnings before interest, tax, depreciation and amortization (EBITDA)
grew 20% to $287 million.
“Rough diamond demand was solid in 2017,” the company said Wednesday. “Factories in India
increased manufacturing capacity as the market normalized following Indian
banknote reform in 2016, and the outlook in key emerging markets improved. This resulted in sustained restocking activity
throughout the pipeline for most of the year.”
In November 2016, the Indian government canceled much of the
nation’s currency, causing many companies to reduce rough purchases significantly
toward the end of the year. Efforts to replenish inventory in the first quarter of 2017
led to a rise in revenue for mining companies.
Rio Tinto’s diamond production grew 20% to 21.6 million
carats during the year, with higher output at both its Argyle and Diavik mines.
The company plans to reduce production in 2018 to between 17 million and 20 million
carats.
Rio Tinto operates the Argyle diamond mine in Australia,
which produces exceptional pinks, as well as high volumes of lower-quality rough stones. The comapny also owns
a 60% stake in the Diavik mine in Canada, in partnership with Dominion Diamond
Mines.
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Tags:
Argyle, Australia, Canada, Demonetization, Diavik, Dominion Diamond Corporation, India, Rapaport News, Rio Tinto, rough
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