Rio Tinto won’t bid for remaining stake in Canadian diamond mine
Tuesday, June 16th, 2020
Rio, which owns 60% of the Diavik mine in Canada’s Northwest Territories, said in a May 28 court filing that it “does not seek to bid” for Dominion Diamond Mines ULC’s 40% stake or its nearby Ekati mine as part of a court-supervised auction.
Washington Companies paid $1.2-billion in 2017 to acquire the assets.
Diamond prices, which had already been hit by lower demand from the world’s largest consumers, China and the United States, suffered another blow as global lockdowns kept shops closed for months during the virus outbreak.
One of the world’s biggest diamonds producers, Rio Tinto also faces the looming closure of its Argyle mine in Australia, known for extremely rare pink diamonds, at the end of 2020. The 37-year-old mine has produced more than 825-million carats of rough diamonds since it began production.
Diamonds make up less than 2% of Rio Tinto’s net earnings, compared with more than 60% from iron-ore.
Diavik produced 6.7-million carats in 2019 but is scheduled to close in 2025, with cleanup costs estimated at $365.3-million, according to court documents.