Surprising 67% Jump in Rio Tinto YoY Q1 Diamond Production

While most diamond miners curtailed their diamond mining, Rio Tinto surprised the industry with increased production in the first quarter of 2009. The multi-commodity miner mined 5.506 million carats in the quarter, compared to 3.296 million carats it mined in the first quarter o 2008. Compared to the preceding fourth quarter, production was down 19.7 percent.

The jump was an outcome of a doubling (103%) in production to 4.404 million carats at Argyle, due to the processing of higher grade ore. The miner processed 881,000 tones of ore in the quarter, compared to 1.55 million tones processed the year before. It therefore seems that the increase in production was somewhat unintended.

Compared to the preceding fourth quarter, production declined 16 percent.

In January 2009, Rio Tinto announced that the Argyle underground mining project will be slowed to critical development activities and the diamond processing facilities will undergo an extended maintenance shutdown of up to three months. This commenced in March.

First quarter production at Diavik was unchanged from the same quarter of 2008, with Rio Tinto’s 60 percent share yielding 1.071 million carats. Compared to the fourth quarter of 2008, production declined 31 percent.

Diavik will stop diamond production for six weeks this summer and again in the winter. During these shutdowns, the mine will be placed on a care and maintenance schedule. As a result, Diavik is expected to produce between five and six million carats of rough diamonds in 2009.

Production at Murowa dropped 40.3 percent year-over-year to 40,000 carats, with Rio Tinto’s share of production totaling 31,000 carats.