Rio Tinto has announced a major upgrade to its Argyle diamond mine in Western Australia, showing the miners is back on the growth path..
The mining giant said today it will invest $US803 million ($860 million) to complete the Argyle underground project.
Argyle is the world's largest diamond mine by volume, and produces the bulk of the world's pink diamonds.
The project, put on hold in 2009 due to the global financial crisis, will expand the life of the world's largest mine for pink diamonds to at least 2019 as the company looks to capture burgeoning demand.
Rio Tinto diamonds and minerals chief Harry Kenyon-Slaney said the investment underlined the company’s commitment to the world diamond industry.
Plans to construct an underground mine below the existing open pit operations were made in 2005, but the project stalled during the global financial crisis when diamond prices plummeted.
‘‘The diamond market continues to recover and long-term industry fundamentals remain healthy,’’ Mr Kenyon-Slaney said.
‘‘A significant supply gap is expected to emerge in the medium to long term and the outlook for demand is strong, driven by the growth of emerging markets.
Production from Argyle has reached above 760 million carats since it began operations in 1985.
The Argyle investment follows Rio Tinto's approval in August of a $US1.6 billion expansion at its Hope Downs iron ore project in Western Australia, with the company back on a growth path after slashing a crippling $US40 billion debt pile.
The company also picked up another 5.3 per cent stake in Canadian miner Ivanhoe Mines, its partner in the massive Oyu Tolgoi copper and gold project in Mongolia, boosting its shareholding to 34.9 per cent through the conversion of a convertible credit facility that matured on Monday.
AAP, Reuters