Rio Tinto Records 6% Growth in 2014 Diamond Revenues
February 12, 15
(IDEX Online News) – Rio Tinto recorded gross diamond revenues of $901 million for the year ended December 31, 2014, a 6 percent increase year over year. The group's net diamond earnings for the year jumped to $104 million, from $53 million a year earlier. Additionally, the division posted a 23 percent year-over-year increase in EBITDA to $315 million.
Capital expenditure for Rio Tinto’s diamonds division for 2014 dropped 54 percent to $148 million due to lower spend on the Argyle underground mine in Australia, which is designed to extend the mine life of the company’s wholly owned Argyle mine until at least 2020.
According Rio Tinto, during 2014, industry diamond prices moved up by six percent. “The medium to long-term fundamentals for the diamond industry remain positive and are expected to support sustainable future price growth. The global mineral resource base is steadily declining, compounded by limited exploration investment and success, and expected reductions in supply over the medium to longer term,” said the miner.
Rio Tinto's diamond production in 2014 decreased 13 percent year over year. Lower carats recovered at Argyle reflected the move from open pit to underground mining, the processing of lower grades as underground production ramped up and a maintenance shutdown during the fourth quarter impacting both underground crushers. Meanwhile, production at the Diavik mine in Canada’s Northwest Territories, of which Rio owns a 60 percent share, was in line with 2013, with improved mining rates and processing plant improvements offset by the impact of lower grades.
Regarding operational growth during the year, Rio Tinto said that its Argyle underground mine remains on track to reach full capacity in 2015, with the second crusher commissioned in July 2014. Moreover, in November 2014, the miner approved the development of the A21 pipe at Diavik, which will provide an important source of incremental supply to maintain existing production levels. A21 is estimated to cost $350 million, with Rio Tinto’s share totalling $210 million, with first production expected in 2018.
In 2015, Rio Tinto’s share of production is expected to be 21 million carats of diamonds.