High Rough Prices Bolster Rio Tinto Revenue

RAPAPORT… Rio Tinto’s rough sales rose 9% to $501 million in 2021 as prices grew amid reduced supply and strong diamond-jewelry sales.

“We saw a recovery in diamond prices following a pandemic-related buildup of demand and low inventory levels,” Rio Tinto said Wednesday.

Net earnings for the division came to $99 million for the year, compared with $9 million in 2020 when the Covid-19 pandemic hindered sales.

Diamond production plunged 74% to 3.8 million carats, reflecting the loss of output from the closure of the company’s Argyle mine in Australia in November 2020. However, production from Canada’s Diavik deposit rose 3% over the previous year. The growth is due to an increased share of production from November 2020, when Rio Tinto acquired joint-venture partner Dominion Diamond Mines’ 40% stake in the site. The extra portion of rough offset the mining of lower-grade ore at Diavik.

Rio Tinto also faced an impairment charge of $292 million on Diavik, given Dominion’s creditor-protection filing and default on cash calls to support the joint venture, the miner noted.

With Argyle now off stream and the company’s 100% acquisition of Diavik completed, Rio Tinto expects to recover between 5 million and 6 million carats in 2022.

Image: An aerial view of the Diavik mine. (Rio Tinto)