Higher Rough Prices Propel Rio Tinto’s Diamond Sales and Return to Profit

(IDEX Online News) -  Rio Tinto’s gross diamond sales in 2010 totaled $682 million, rising 51.6 percent from 2009. Net earnings from diamond sales of $70 million are a return to profitability after the company posted a $60 million loss in 2009. The improvement was mainly achieved through increasing rough diamond prices.

The rise in diamond revenues comes despite a 1 percent decline in diamond production to 13,843,000 carats. The company benefited from an increase in demand and prices for diamonds as the worldwide economy emerged from the global financial recession.

This is demonstrated by the 53.6 percent rise in the average per-carat price the company achieved in 2010, $49.27, compared with $32.08 p/c in 2009.

“Rough diamond prices demonstrated a robust recovery throughout 2010 as demand from emerging markets, notably India and China, accelerated.” Rio Tinto said, adding, “In the short run, the sustainability of this recovery will be, in part, dependent on U.S. consumer confidence.”

The multi-commodity miner reported record group earnings of $14 billion, 122 percent above 2009. It said higher price on all major commodities in 2010 bumped underlying earnings by $9.51 billion compared with 2009.

Copper prices were up 47 percent, gold prices increased by 26 percent and aluminium prices were 31 percent higher than 2009.