The Argyle mine will not shut down–which is good news for the Indian industry and companies that sell small diamonds.

Rio Tinto announced this week plans to develop a $760 million underground project at Argyle.

An additional $150 million will be spent on a related open pit cutback, which will enable production to continue from the end of open pit mining in 2008 to the ramp up of the underground mine. Development work will continue and construction of the underground mine will begin once government approvals have been finalized.

The average annual production over the life of the underground mine from 2007 to 2018 is expected to reach approximately 60 percent of Argyle’s historical annual average of 34 million carats and of similar quality.

“This investment springs from Rio Tinto’s proven capacity to develop large scale underground mines and to compete successfully in the global diamond business,” said Rio Tinto Chief Executive Leigh Clifford. “It will allow the Argyle mine – the world’s largest diamond mine- to operate beyond 2008.” 

Clifford added, “The Argyle brand and its signature stone – the pink diamond- will continue to play an important role in the global diamond market,” said Ketih Johnson, Keith Johnson, chief executive of Rio Tinto Diamonds. “This is a particularly good decision for the East Kimberley area, the Indian cutting and polishing industry and the affordable fashion jewelry industry, each with a degree of dependence on the Argyle business.”

JCK