Rio Tinto to spend $40m on Diavik diamond mine expansion

Rio Tinto is going ahead with a $40 million expansion of its iconic Diavik diamond mine in the Northwest Territories of Canada, which will extend the operation’s life to at least early 2026.

The approved first phase of the project will expand diamond extraction underground, below the existing A21 open pit. Mining of that area, opened in 2018, recently concluded.

A second phase an additional cost will be put forward for approval in 2024, Rio said.

Phase one below A21 is slated to produce an extra 1.4 million carats, with phase two adding another 800,000 carats.

“This is good news for our employees, partners, suppliers and local communities in the Northwest Territories,” Sinead Kaufman, Rio Tinto Minerals’ chief executive, said in a statement.

Rio Tinto became in 2021 the sole owner of the operation, after buying the 40% share held until then by Dominion Diamond Mines.

The company has operated Diavik since production began in 2003. Located approximately 300 km north-east of Yellowknife, the mine employs over 1,100, of which 17% are Northern Indigenous people.

Diavik is Canada’s largest diamond mine in terms of production with between 6 and 7 million carats of rough diamonds produced each year. Since mining began in 2003 Diavik has produced over 100 million carats of diamonds.

The Northwest Territories’ two other diamond mines – Ekati, operated by Arctic Canadian Diamond and De Beers-Mountain Province’s Gahcho Kué – are expected to close in 2024 and 2028, respectively.

Diavik is about 30 km southeast of Ekati, and Gahcho Kué is 125 km southeast of Diavik.

Source: Mining.com

Rio Tinto Buys Remaining Share of Diavik Diamond Mine

Rio Tinto office in Montreal, QC, Canada

Rio Tinto, the world’s second-largest miner, just became the sole owner of the Diavik diamond mine in Canada’s Northwest Territories on Thursday. Despite saying in the past the Company was not interested in taking full control of the aging arctic mine, Rio Tinto ended up buying the 40% share held by Dominion Diamond Mines for a total stake of 100%.

Part of the transaction includes Rio Tinto releasing Dominion and its lenders from any outstanding liabilities or obligations involving funding the operation or the closure of the joint venture. On the other end, Rio Tinto will receive all remaining Diavik assets held by Dominion including a security cash collateral for the potential future closure for the mine and unsold production.

Why the Buyout Now?
Dominion, which used to be the fourth-largest diamond producer, suffered some financial troubles which played out in court over several months last year. These troubles ultimately led Dominion to sell its other Canadian mine, Ekati in December 2020. In 2017, The Washington Companies ended up buying the Company for $1.2 billion.

This deal follows a 19 month long process beginning in April 2020 by Dominion Diamond Mines filing for insolvency protection under the Canadian Companies’ Creditors Arrangement Act.

Diavik has been in production since 2003 and is eventually facing closures in 2025 which will cost hundreds of millions of dollars to fully clean up. Diavik is Canada’s largest diamond mine, and yielded 6.2 million carats of rough diamonds in 2020.

Rio Tinto Minerals boss Sinead Kaufman said in a statement, “Diavik will now move forward with certainty to continue supplying customers with high quality, responsibly sourced Canadian diamonds.”

Worries and concerns began to surround the diamond market due to production coming to a

halt during the global COVID-19 pandemic, with some people worried the market would never recover. However, Alrosa, the world’s top diamond miner by output, claims the market has fully recovered from the effects of the global pandemic, and sales of jewelry and rough diamonds are up 23% this year compared to 2020.

Source: miningfeeds

Dominion Diamond Mines sale of Ekati falls through

Ekati and Diavik diamond mines

The future of the Ekati diamond mine in Canada’s Northwest Territories remains uncertain after Dominion Diamond Mines announced that a deal to sell it to a subsidiary owned by its parent company, The Washington Companies, has fallen apart.

Dominion Diamond reported on Oct. 9 that three insurance companies – Aviva Insurance Company of Canada, Argonaut Insurance and Zurich Insurance – had reached “an impasse” in negotiation with the purchaser, and stated “there is no reasonable prospect of reaching a satisfactory agreement among them.”

Dominion Diamond, which was purchased by The Washington Companies in November 2017 for $1.2 billion, was granted creditor protection in April. Mining was suspended and the Ekati mine placed on care and maintenance in March due to the coronavirus.

Altogether, the three insurance companies have issued about C$280 million in surety bonds to the government of the Northwest Territories that were intended to guarantee that the diamond mine could be closed safely and reclaimed once the mine closes permanently.

The sale was subject to a condition that the insurance companies and the purchaser reached an agreement on the treatment of the existing surety bonds.

Dominion remains in creditor protection until November 7, 2020, unless extended, it said, and is working with its advisors on next steps.

“The company will be assessing all strategic alternatives to return the Ekati diamond mine to full operations for the benefit of its employees, the Northwest Territories and other stakeholders,” Dominion Diamond stated in its news release.

The company has also confirmed that Pat Merrin, the company’s interim CEO since February, has relinquished that role. “In light of this development, Pat has advised that it would be appropriate that he step down as Interim CEO,” a company spokesman wrote in an email to The Northern Miner.

“Kristal Kaye, CFO and Mike Welch, COO will lead Dominion through this challenging period with strong support from the rest of the management team and our independent Chairman Brendan Bell.”

Dominion Diamond Mines is one of the world’s largest producers and suppliers of premium rough diamonds. The company owns a controlling interest in the Ekati diamond mine, which it operates, and 40% of the Diavik diamond mine. It also holds a controlling interest in the Lac de Gras diamond project. All of its assets are in the Northwest Territories.

Source: Northern Miner

Diavik ‘Stars Of The Arctic’ Provide Rough Diamond Tender Sparkle

Arctic Star Rough Diamond

Rio Tinto and Dominion Diamond Mines have revealed three of the finest large rough diamonds from their Canadian diamond mine that will be tendered to diamond specialists from around the world.

Collectively known as The Diavik Stars of the Arctic, the three rough diamonds showcase a rare combination of size, quality and color from the Diavik diamond mine in the remote Northwest Territories of Canada, 220 kilometers south of the Arctic Circle, the miner said in a statement.

The Diavik Stars of the Arctic will headline Rio Tinto’s forthcoming “Specials” Tender, which showcases rough diamonds greater than 10.8 carats. Taking their inspiration from constellations across the night skies of the North.

The Diavik Stars of the Arctic comprised of the, Vega of the Arctic, 177.71 carats, one of the largest and most valuable gem quality rough diamonds ever produced in Canada , Altair of the Arctic, 59.10 carats, a white gem quality rough diamond Capella of the Actic , 24.82 carats, a yellow diamond

Diavik Diamond Mines president and chief operating officer Patrick Boitumelo said, “Diavik diamonds are over two billion years old and it has taken 15 years of production to unearth these extraordinary diamonds, underscoring the ongoing importance of the Diavik ore body in the context of the global diamond industry.”

The Diavik Diamond Mine owned by Rio Tinto 60 per cent and joint venture partner Dominion Diamond Mines (40%) began production in 2003 and has been a fully underground mining operation since 2012. It recently opened its fourth pipe, the A21 pipe, which will provide an important source of incremental production.

The Diavik mine produces predominantly gem quality diamonds destined for high end jewelry in all major consumer markets around the world. The discovery of Lot 3, Capella of the Arctic, a large yellow diamond is very rare, with the mine on average producing only five of these diamonds each year, in effect less than 0.001% of annual production.

The Diavik Stars of the Arctic will be showcased in Antwerp and Israel to large diamond specialists from around the world before bids close on October 25.

Source: IDEX Online