Rio Tinto this morning announced it would inject US$803 million (A$859 million) to ramp-up the underground block cave project at its Argyle diamond mine in Western Australia.
The mine, located 2500 km from Perth in the Kimberley region, currently produces around 90% of the world’s supply of pink diamonds, as well as significant amounts of champagne, cognac and white diamonds.
Rio made a decision in 2005 to transform the project from an open-pit operation, which commenced in 1985, to an underground mine with production of nine million tonnes a year by 2013.
The company estimates this will extend the mine lifespan to at least 2019.
According to Rio, the funding will go towards to ramping-up construction activity in the first half of next year.
The money will cover project development and construction of extraction services, crushers, a conveyer and pump stations.
“This investment in the Argyle underground underlines our commitment to, and confidence in, the world diamond industry,” Rio Diamonds and Minerals chief executive Harry Kenyon-Slaney said.
“The project was slowed in 2009 due to the global financial crisis but the diamond market continues to recover and long-term industry fundamentals remain healthy.
“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.
“Argyle is well positioned to capture the new demand.”