Argyle Maintenance Shutdown to Reduce Diamond Production

Rio Tinto decided to slow down its underground mining project at Argyle to only critical development activities and ease diamond production at the Australian diamond mine in 2009. The miner cited its debt reduction plan and the current global market conditions as the reasons for the move.

Argyle (above) produces 90% of the world’s pink diamonds. Annual production averages 20 million carats, most of it sold to India.

Rio Tinto’s Argyle Diamonds Limited will slow down its underground mining effective immediately, resulting in a workforce reduction and a demobilization of contractors, the company announced Wednesday.

“Given global market conditions, we will also reduce diamond production by taking an extended maintenance shutdown of the diamond processing facilities for up to three months, commencing in March,” said Argyle Diamonds Chief Operating Officer Kevin McLeish.

The first to be affected by the reduction is the Indian diamond industry, Argyles main consumer. In Mumbai and Surat, rough diamond purchases have already been curtailed since November.

“Employees directly affected will be redeployed to maintenance, training and plant improvement activities as well as taking leave.”

 “We remain convinced that the diamond business has excellent long term prospects. Argyle has at least 10 years of world class resources remaining and is well placed to continue as a major player in this industry for many years to come,” McLeish added.