Rio Tinto Diamond Q2 Production -72%
July 15, 09By the end of the second quarter, Rio Tinto decreased diamond mining production to just 1.281 million carats, a 72 percent year-over-year decline and a 77 percent cut compared to the first quarter of 2009. The figures appear in the second quarter 2009 operations review published Wednesday by the company.
Rio Tinto, however, decreased first half production by just 14 percent due to a surprising jump in production in the first quarter, when it mined a total of 5.506 million carats of diamonds.
Production at Argyle plummeted to 408,000 carat from 4.404 million carat mined at the Australian mine in the first quarter, a 90.74 percent difference.
Rio’s 60 percent of Diavik yielded 853,000 carat of goods in the quarter, a 20 percent decline from the previous quarter. Murowa in Zimbabwe, where Rio has a 78 percent stake, produced the company 20,000 carat of goods, down from 31,000 carat in the first quarter of the year.
Both prices and sales volumes for diamonds have been severely impacted by the economic downturn. The effect on the rough diamonds market has been exacerbated by the lowering of inventory levels in the diamond pipeline, resulting from reduced global liquidity.
The multi-commodity miner said in the review that second quarter carat production at Argyle declined by 86 percent compared with the same quarter of 2008. This followed the maintenance shutdown at the processing facilities from March to May. Processing recommenced in June.
Second quarter production at Diavik was 44 percent lower than the same quarter of 2008 with operations scaling back production in response to the economic slowdown.
“Diamond production has ceased temporarily and the mine has been placed on a care and maintenance schedule. Following these measures, Diavik is expected to produce between five and six million carats (100 per cent basis) of rough diamonds in 2009,” it said.
Rio also noted that work progressed on a number of projects, including on the Bunder, India diamonds claim.
Rio Tinto Diamonds is holding rough diamond sales in Antwerp this week.