Rio Tinto plans to stay active in the diamond sector despite the impending closure of the Argyle diamond mine in Western Australia in late 2020, Reuters reported Sept. 26, citing Arnaud Soirat, the company's chief executive for copper and diamonds.
Ninety percent of extremely rare pink diamonds come from Argyle, and prices have risen 500% since 2000, according to Soirat, even amid a slump in prices and demand for colorless stones amid global economic concerns and a supply glut caused by laboratory-made gems, Reuters added.
"Diamonds is a business we like a lot. It's a very high-margin business in line with our strategy of value over volume," Soirat said.
Argyle's closure will wipe out about 75% of the diversified miner's diamond output, but the effect will be negligible on its earnings as the commodity only brings in about 2% of company earnings, compared to its iron ore business, which accounts for nearly 60%.
CEO Jean-Sébastien Jacques confirmed in July 2018 that there was no economic case to continue Argyle's operations beyond 2020. The CEO has backed a push to discover new diamond mines as its current operations "are on their last legs," with the Argyle mine's upcoming closure and the 60%-owned Diavik mine in Canada targeted for a 2025 shutdown.
