Rio Tinto today reported a slump in half-yearly sales and production as its Diavik diamond mine in Canada slid into the red.
The Australian mining giant reported a 15 per cent increase in overall profits across all divisions to $5.8bn for the six months to 30 June, but its diamond operation suffered a $65m loss. During the same six months of 2023 it made a $44m profit.
The Half Year Results made passing mention of “lower volumes” of diamonds, but chief executive Jakob Stausholm offered no explanation.
Revenue from diamond sales was down 40 per cent during H1, from $250m to $149m. Production fell 25 per cent, from 1.924m carats to 1.441m carats.
Earlier this month the company said production at Diavik had fallen by by 28 per cent during Q2, impacted by the transition to underground operations and the plane crash in January that killed four of its workers and two crew members. A chartered Jetstream twin turboprop airliner crashed shortly after take-off from Fort Smith Airport.
A number of remote employees at Rio Tinto’s Diavik diamond mine in Canada died Tuesday after the small plane carrying them to the site crashed.
“We have been informed by authorities that a plane on its way to our Diavik mine, carrying a number of our people, crashed…resulting in fatalities,” said Rio Tinto CEO Jakob Stausholm.
The company has not disclosed how many died on board the aircraft, which seats 19 people. The plane crashed near Fort Smith in the Northwest Territories shortly after takeoff. Rio Tinto employs many remote workers, who operate in shifts at the mine. Because of its isolated location, the miner transports workers by aircraft to and from the deposit.
“I would like to extend our deepest sympathy to the families, friends and loved ones of those who have been affected by this tragedy,” Stausholm said. “As a company, we are absolutely devastated by this news and [are] offering our full support to our people and the community, who are grieving today. We are working closely with authorities and will help in any way we can with their efforts to find out exactly what happened.”
Northwest Territories Premier R.J. Simpson also mourned the loss.
“It is with a heavy heart that I express my deepest condolences to the families, friends, and loved ones of those who were aboard the Northwestern Air flight that crashed outside of Fort Smith today,” he noted. “The impact of this incident is felt across the territory…. As we seek to understand the circumstances of this tragedy, I’d also like to extend a heartfelt thank you to the first responders and rescue teams who continue to work tirelessly at the crash site.”
It is unclear whether the crash will impact diamond production or sales at Diavik.
Rio Tinto’s diamond production fell in 2023 following the closure of portions of its Diavik mine in Canada earlier in the year.
Total production dropped 28% to 3.3 million carats for the full year, the company said Tuesday. Rio Tinto completed mining at Diavik’s A418 underground area and at its A21 open-pit kimberlite pipes, it explained. Improvements in the volume of ore produced at the A154N underground partially offset the loss in output from those portions.
In the fourth quarter, output slipped 50% year on year to 659,000 carats, and was down 13% from the previous quarter.
Diavik is Rio Tinto’s sole diamond mine following the closure of Australia’s Argyle deposit in November 2020. The miner’s share of Diavik increased from 60% to 100% in November 2021, when it assumed control of the asset following the inability of its joint-venture partner, Dominion Diamond Mines, to pay its share of upkeep. In November, Rio Tinto also sold its 75% share of the Fort à la Corne diamond exploration project in Saskatchewan to joint-venture partner Star Diamond Corporation, in an effort to focus on metals and minerals.
Rio Tinto will spend $40 million to move into underground mining at the A21 portion of Diavik, which it believes could add more than 2 million carats of rough production, it reported in February 2023. That expansion is due to keep the mine in operation until the first quarter of 2026.
Meanwhile, the company did not provide rough-production guidance for 2024.
