Famed more for the fistful of coveted pink and red gems it yields each year than being a major producer of lower-quality stones, is being shuttered by Rio Tinto Group after almost four decades. Rivals from Russia to Canada hope that can help turn around the beleaguered industry.
Rio’s Argyle mine in remote Western Australia has transformed the sector since 1983 when the operation began supplying gems for both ends of the market. RBC Capital Markets and Panmure Gordon are among brokers, banks and competitors forecasting the closure could kick-start prices that have waned since 2011, according to PolishedPrices.com, an industry data provider.
Production at Argyle, about 2,600 kilometers (1,600 miles) northeast of the state capital Perth, is scheduled to end before the end of next year after finally exhausting its supply of economically viable stones, said Arnaud Soirat, Rio’s head of copper and diamonds.
“There is going to be a fair bit of supply which is going to come out of the market,” Soirat said in an interview Friday at the mine site. “In late 2020 we’ll be stopping operations and will start the rehabilitation of the site.”
Argyle is best known as the source of about 90% of the world’s prized pink diamonds — rose-to-magenta hued stones that command among the sector’s highest prices. Sotheby’s auctioned the 59.6 carat “Pink Star”, mined by Rio’s rival De Beers, for $71 million in April 2017, a record auction price for any gem. While they attract the most attention, the pink stones account for less than 0.01% of Argyle’s total output.
Rio Tinto’s Argyle diamond mine is about to close. Pinks are about to get rarer (again). Rio Tinto is one of those ‘other’ diamond mining companies that you may not have heard of.
Shared by Neil Beaty