Rio Tinto reported that its 2007 fourth quarter diamond production fell 18 percent to 7.807 million carats as a result of significantly lower output from its flagship Argyle mine in Australia. Fourth quarter production at Argyle dropped 25 percent to 5.995 million carats, and full-year output fell 36 percent to 18.744 million carats.
“Variability in feed grade and production rates is expected to continue as the open-pit operation approaches the end of its life and the mine transitions to an underground operation,” the company reported in a statement.
Rio Tinto’s production share at Diavik grew 18 percent to 1.766 million carats during the fourth quarter. For the full year, the share increased 22 percent to 7.166 million, and Rio Tinto’s diamond production dropped 26 percent to 26.023 million carats. The Diavik mine produced a total of 11.943 million carats in 2007. In November 2007, Rio Tinto and Harry Winston approved $563 million in funding for the construction of underground production at Diavik, scheduled to commence in 2009 and continue through 2020.
Rio Tinto has full ownership of the Argyle mine, a 60 percent stake in the Diavik mine in Canada’s Northwest Territories, with Harry Winston Diamond Corporation holding 40 percent, and a 78 percent share in Murowa Diamonds in Zimbabwe. Rio Tinto’s share of operations at Zimbabwe’s Murowa mine yielded 46,000 carats of diamonds in the final three months of the year, up 18 percent from the same period in 2006. End-of-year production fell 40 percent to 113,000 carats.
Rio Tinto recently stated that it was becoming increasingly unrealistic to invest in the Murowa mine due to Zimbabwe’s economic turmoil and the government’s plans to implement its indigenization laws, which would require foreign mining companies to surrender a portion of their operations to local companies.
West African Diamonds at Full Production in Sierra LeoneWest African Diamonds reported that its Plant 11 Tailings Mine in Koidu, Sierra Leone, has ramped up to full production. The first diamond and gold sale is planned for the first quarter of 2008.
“Plant 11, which should produce revenue for a number of years, provides a sound foundation on which to build our other mines in Sierra Leone and Guinea,” explained James Campbell, deputy chairman.
More than 3,100 diamonds or 198 carats have been recovered from the 16,100 tons of material that have been treated and the first gold pour has taken place, according to spokespersons. The company plans to begin selling diamonds from Plant 11 in mid-February.
Overall output for the 7-million-ton deposit is expected to amount to approximately 0.4 grams per ton of gold worth $9 a ton of ore and diamonds worth $3 a ton of ore. The plant has been commissioned at its targeted capacity of 150 tons per hour and is currently operating on an extended day shift basis.
West African Diamonds is a diamond-focused explorer with operations in Sierra Leone and Guinea.
BHP Billiton’s Diamond Production UpBHP Billiton’s Ekati diamond mine produced 31 percent more rough diamonds in the first half of its fiscal year ended December 31, 2007, reaching 1.865 million carats. In the second quarter, production declined 10 percent to 843,000 carats.
The strong first half reflected higher recovery rates and grades, as well as larger amounts of lower-value carats.
Tahera Files for Protection From CreditorsTahera Diamond Corporation, a mining firm whose stock has been declining since February 2006, has filed for and received protection from creditors under Canada’s Companies’ Creditors Arrangement Act (CCAA).
Tahera had hoped to raise $39 million in a rights offering that would have included a conversion of Tiffany & Co. and Nuna Logistics debt into equity. However, there was a lack of interest in the proposed share offering. The company will continue its day-to-day operations under CCAA protection, which expires on February 14 under the initial 30-day allotment granted by the Ontario Superior Court of Justice, but its share value dropped 50 percent after the filing was announced. The protection order will then be renewed or terminated.
The firm’s Jericho mine has been steadily losing revenue since it opened in 2006.
Article from the Rapaport Magazine - February 2008. To subscribe click here.