Rio Tinto has become the sole owner of Diavik Diamond Mine in Canada’s Northwest Territories, after the ownership transfer was approved by the Court of Queen’s Bench of Alberta.
Rio Tinto had traditionally owned 60% of the mine and operated it; until recently, Dominion Diamond Mines owned the other 40%. But last year, Dominion, which had been purchased by Washington Companies in 2017, filed for insolvency protection under Canada’s Companies’ Creditors Arrangement Act.
At one point, Dominion sued Rio, its longtime partner in Diavik. Last year, the mine’s continued operation was said to be “at risk” over $120 million owed by Dominion. The new agreement indicates that the litigation has been settled.
Under the terms of the transaction, Rio Tinto has acquired all remaining Diavik assets held by Dominion, including unsold Diavik production and cash collateral held as security for Diavik’s future closure costs. In return, Rio Tinto released Dominion and its lenders from all outstanding liabilities and obligations to fund the joint venture’s operations and closure.
As the Rio-owned Argyle mine shut in 2020, Diavik is now Rio Tinto’s sole operating diamond property, though it continues to explore for diamonds elsewhere. Diavik is due to close down in 2025.
The mine employs more than 1,100 employees, 17% of whom are northern Indigenous people. In 2020, it produced 6.2 million carats of rough diamonds.
Dominion also owned the Ekati mine in Canada’s Northwest Territories. That has since been taken over by a new company, Arctic Canadian Diamond Co., owned in part by former Dominion bondholders.
Rio Tinto Minerals CEO Sinead Kaufman said in a statement: “Diavik will now move forward with certainty to continue supplying customers with high quality, responsibly sourced Canadian diamonds and making a significant contribution to the Northwest Territories of Canada and local communities. As owner and operator, Rio Tinto is committed to delivering Diavik’s eventual closure safely and responsibly, to leave a positive legacy in consultation with our community and government partners.”
(Photo courtesy of the Diavik Diamond Mine)Follow JCK on Instagram: @jckmagazine
Follow JCK on Twitter: @jckmagazine
Follow JCK on Facebook: @jckmagazine