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Rio Tinto 1H Diamond Production +23%

Jul 16, 2015 7:34 AM   By Ronen Shnidman
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RAPAPORT... Rio Tinto’s  rough diamond output jumped 23 percent year on year to 4.696 million carats during the three months that ended on June 30, according an operations review released by the company on Thursday. The company attributed the significant increase  to the continued ramp-up of production at the Argyle underground mine in Western Australia, where it climbed 37 percent to 3.374 million carats, as the amount of diamond ore processed surged 68 percent to 1.2 million tonnes.

Rio Tinto’s share of production at the Diavik mine in Canada’s Northwest Territories was flat at 1.285 million carats as an increase in the recovered ore-grade offset a decline in the amount ore processed during the period. Diavik is operated by Rio Tinto, which holds a 60 percent stake in the mine with the balance owned by Dominion Diamond Corporation.

Rio Tinto’s share of production at the Murowa mine in Zimbabwe plummeted 56 percent to 37,000 carats. Output at the mine began a steep decline in the first quarter, following mixed messages from the government of Zimbabwe regarding potential new tax and lease increases, with the company reportedly seeking to minimize any tax liability until the issue was resolved. On June 17, Rio Tinto sold its 78 percent stake in the mine to junior local partner RioZim, a former Rio Tinto subsidiary spunoff in 2004.

For the first half, Rio Tinto’s rough diamond production increased 18 percent to 8.851 million carats as the start of underground mining at Argyle more than offset a decline in Diavik's output. The decline in production at Murowa did not significantly impact Rio Tinto’s overall production.

Rio Tinto's management said it expected to increase diamond production by 45 percent year on year to 20 million carats in 2015.
Tags: Argyle, Diavik, forecast, guidance, Murowa, Rio Tinto, RioZim, Ronen Shnidman, rough
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