Rio Tinto H1 Diamond Production Declines 26%,

(IDEX Online News) – Multi-commodity miner Rio Tinto is reporting a continued decline in diamond production. In the second quarter of the year it mined 2,733,000 carats, a 24% decline compared to the prior year, the company said Thursday. It expects to end the year with a 6% decline in production.

The steep decline in diamond production comes as demand for rough is soaring. In the first six months of the year, Rio Tinto produced 5,232,000 carats, a 26% decline, according to a second quarter 2011 operations review.

Second quarter production at Argyle was impacted by lower tonnes processed following the significant rainfall that occurred in March and April, the company reported.

Lower grades have compounded the production shortfall: in 2011 ore is being extracted from the North Pit where grades are significantly lower than the South Pit ore that was processed in 2010.

In addition, a small volume of high-grade development ore from the Underground was halted until the pit dewatering associated with heavy rainfalls in the first quarter was completed.

Production at Argyle totaled 1,580,000 carats in the quarter, declining 39.4% year over year.

Diamond production at Diavik was 11% higher than the second quarter of 2010 and 32% higher than the first quarter of 2011. This was driven by an increase in ore processed from mine sequencing, which enabled access to higher grades from the A418 open pit.

At Murowa, diamond production increased to 80,000 carats.

In 2011, Rio Tinto’s share of diamond production is expected to be 13 million carats, down from 13.84 million carats produced in 2010.