09 Feb

West Australian: Rio’s Argyle diamond mine faces uncertain future

Rio Tinto is reviewing its plans to extend the life of the Argyle diamond mine, as the resources giant books a big impairment on the asset.

Rio is still to make a call on whether the second stage of the underground block cave at the East Kimberley mine will go ahead.

It spent $US2.5 billion expanding Argyle below ground, but even under previous plans it would still close by 2021. Its remaining lifespan could be considerably shorter without the planned underground extension.

Rio took a $US241 million before-tax impairment on Argyle’s book value in yesterday’s annual financial results, and Rio boss Jean-Sebastien Jacques confirmed the mine’s future was under review.

“It’s a pretty challenging market environment. Diamond prices are not great, except for the nice pink ones, so it’s a pretty challenging situation,” he said.

“I can’t make any comment on any extension of the block cave at this point in time because everything is under review,” he said.

Rio shares were down 39 cents to $65.30 at 7.45am after the company yesterday delivered a full-year profit of $US4.617 billion after a strong rebound in commodity prices in 2016, particularly iron ore.

Source: The West Australian
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