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Rio Tinto Slashes Argyle Outlook

Mar 5, 2018 10:56 AM   By Rapaport News
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Rio Tinto has lowered its estimate of diamonds it can viably extract from the Argyle mine, after experiencing operational difficulties and reducing its price forecast.

The asset’s ore reserves slumped 45% to 16 million tonnes at the end of 2017 versus a year earlier, the company said in a statement last week. That translates to 38.5 million recoverable carats, at a grade of 2.4 carats per tonne of ore. Reserves are the economically extractable material present in a mine, and are distinct from resources, which refer to all deposits.

The decrease includes almost 5 million tonnes of ore that Rio Tinto depleted during the year at the mine in Australia. It comprises a further 3 million tonnes due to reduced production outlook resulting from operational challenges in 2017, it said.

Rio Tinto also cut its price expectation for the mine for 2020 and 2021, resulting in a higher “economic shut-point” — the minimum volume it must produce per quarter for operations to be worthwhile. This, combined with adjustments to its estimates of future mining grades, shaved just over 5 million tonnes off its reserves.

The available reserves will enable Argyle operations to continue until 2020. The company could increase the estimate and extend the life span beyond that, depending on how the mine performs, it added.

Image: Rio Tinto
Tags: Argyle, Argyle mine, Australia, mining, Production, Rapaport News, reserves, resources, Rio Tinto
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