Rio Tinto to Invest $803 Million to Complete Underground Argyle Project

Argyle is a leading supplier to the Indian diamond industry

After a period of slowed development, Rio Tinto will ramp up the underground block cave project at its Argyle Diamond Mine in Western Australia. The miner will invest $803 million in the project, expecting the underground operation to be fully operational in 2013.

The Argyle mine has been an open pit operation since production commenced in 1985. The underground project will extend the mine life until at least mid-2019.

The initial $1.5 million budget to extend the mine was approved in December 2005; however, the project has been slowed to critical development activities due to the global economic recession and its impact on diamond sales.

Construction activity will ramp up in the first half of 2011, with targeted production rates of nine million tonnes a year forecast within two years. In the first half of 2010, Argyle processed 3.7 million tonnes and produced 5.1 million carats.

According to Rio Tinto Diamonds and Minerals Chief Executive Harry Kenyon-Slaney, the investment underlines the firm’s confidence in the world diamond industry. “The project was slowed in 2009 due to the global financial crisis but the diamond market continues to recover and long-term industry fundamentals remain healthy,” he said.

“A significant supply gap is expected to emerge in the medium to long term and the outlook for demand is strong, driven by the growth of emerging markets,” Kenyon-Slaney added.

The block cave mining technique that will be used at the project uses gravity to extract ore. The underground mine will feature a high level of automated mining technology, the company noted.