Rio Tinto 2005 Diamond Production Leaps 41.4%

Diversified miner Rio Tinto today reported a leap in diamond production for 2005, with increased production at each of its three mines. The miner produced 35.6 million carats in 2005, up from 25.2 million in 2004 – a 41.4 percent increase.

The Argyle mine, which is completely owned by Rio Tito, registered a 48 percent increase in production over 2004, from 20,620,000 carats to 30,476,000. Earnings also leapt at Argyle, from $40 million in 2004 to $117 million in 2005. Production at the mine returned to more normal levels in 2005 following the tight mining conditions experienced in 2004.

In December, Rio Tinto announced its decision to develop a $760 million block cave underground projection at the Argyle mine, with an additional $150 million to be spent on a related open pit cutback. This will extend the life of the mine's operation to 2018.

Production at the Diavik mine, of which Rio Tinto owns 60 percent, rose from 4,545,000 to 4,963,000 - an increase of 9 percent. Despite the increase in production, at $143 million, earnings from the Diavik mine fell $4 million below 2004 earnings. The company reports that higher prices and volumes were offset by a stronger Canadian dollar and increased earnings costs.

Output at the Murowa diamond mine in Zimbabwe increased by 442 percent; from 36,000 carats in 2004, to 195,000 carats in 2005. Rio Tinto's 78 percent share of earnings from the mine, which began production in 2004, was $21 million.

Rio Tinto's mined gold output also increased. Gold production increased 40 percent from 1,164,000 ounces in 2004, to 1,626,000 ounces in 2005.