Rio Tinto Considers Cutting Ties with Star Diamond
RAPAPORT… Rio Tinto has put the Star-Orion South diamond project in Canada on hold until the end of the year while it weighs a possible exit from the venture.
The Australian miner will not contribute financially to the Fort Ã la Corne (FalCon) exploration during that time other than for care and maintenance, its joint-venture partner Star Diamond said Wednesday. Over the next six months, Rio Tinto plans to review its alternatives regarding the site, including removing itself completely.
â€œThe board of directors of Star Diamond is disappointed by these decisions,â€ the company noted, adding it would work with Rio Tinto to assess alternative measures.
The move comes after the parties last year settled a long-running legal dispute over the terms of the joint-venture agreement, during which Star Diamond considered cutting Rio Tinto out of the project. The two signed a new agreement in December 2021 that called for Rio Tinto to front the funds for the project until the companies decided whether to develop the mine, based on the results of a feasibility study. In return, Rio Tintoâ€™s share in the project was upped to 75% from its previous 60% holding.
In May, Star Diamond reported the study showed a â€œsignificant proportionâ€ of high-value, type IIa rough in Star-Orion South, with two of its units containing between 46 million and 79 million carats. Rio Tinto was pleased with the results, according to Star Diamond.
â€œRio Tinto confirms it has advised Star Diamond…that it is reviewing options for the FalCon project, which will continue in care and maintenance through to the end of 2022,â€ a Rio Tinto spokesperson told Rapaport News. â€œThere are many variables to be considered in the next steps, and we are working closely with Star Diamond and local stakeholders to assess the options, including a potential exit.â€
Image: The Star-Orion South exploration project. (Star Diamond)