LONDON-listed miner Rio Tinto announced plans to expand its Argyle diamond mine in Western Australia yesterday, the latest step in its plan to spend about $13bn (£8.4bn) through the end of 2011 to boost growth.
Rio Tinto said it plans to invest $803m to develop an underground mine under the existing open pit, ramping up production from 2011 to reach 9m tonnes of diamond-bearing ore a year within two years.
The project, put on hold in 2009 due to the global financial crisis, will expand the life of the world’s largest mine for pink diamonds to at least 2019 as the company looks to capture burgeoning demand.
“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,” Rio Tinto diamonds and minerals chief executive Harry Kenyon-Slaney said in a statement.
The Argyle investment follows Rio Tinto ‘s approval in August of a $1.6bn expansion at its Hope Downs iron ore project in Western Australia, with the company back on a growth path after slashing a crippling $40bn debt pile.
Diamonds contributed $75m to Rio Tinto’s group earnings at its latest interim results.