Vancouver — After much deliberation,
The company will spend US$760 million to develop the underground operation which will employ block cave methods and is expected to begin production in 2007 for about 11 years. Later-stage, sub-level caving could potentially add another several years of mine life, to about 2024.
Production is anticipated at about 60% of average historic, open-pit yields of 34 million carats, annually. At 20 million carats per year, the mine will still account for over 13% of the world’s output by volume, compared with its current 22% share.
Rio Tinto successfully lobbied the Western Australia government for royalty concessions (cut to 5% from 7.5%) to help trim costs of future production from the mine. Some secondary processing and sorting obligations have also been waived, although the fancy pink diamonds the mine is famous for will still be cut and polished in Perth. Argyle is the largest single contributor to the Kimberley region’s economy. In addition, diamonds from the mine, shipped to India for cutting and polishing, directly and indirectly employ about 200,000 people.
Buoyant rough diamond prices also encouraged Rio Tinto to go underground on Argyle, the world’s largest producer by volume.
The company is spending US$150 million on a further cutback on the massive Argyle open pit to extend production through the transition phase. Rio Tinto has spent about A$100 million (US$75 million) on feasibility studies, including a 2.4-km exploration decline beneath the existing pit.
Production from the open pit is expected to cease by 2008.
For the first three-quarters of 2005, Argyle produced over 24 million carats of diamonds, up 107% from the corresponding period in 2004 when lower-grade ore was processed. About 6.8 million tonnes of ore was processed, yielding a recovered grade of about 3.5 carats per tonne.
Be the first to comment on "Rio Tinto going deep on Argyle mine (December 26, 2005)"