Rio Tinto reports 70% drop in diamond production

Radical scaling back of diamond production by Rio Tinto (RTP-N, RIO-L) in the second quarter has resulted in a 70% reduction in attributable diamond output from its three diamond mines.

From its wholly owned Argyle diamond mine in Australia, second quarter production totalled a mere 408,000 carats versus 4.4 million carats during the same period last year, or an 86% reduction. This is due to a maintenance shutdown from March to June 2009. Processing started up again last month.

At its 60%-owned Diavik mine in Canada’s Northwest Territories, Rio Tinto’s attributable production slipped to 853,000 carats during the quarter, or a 44% drop. Total mine production fell from 1,785,000 carats to 1,421,000 carats. Harry Winston Diamond owns the remainder.

At its 77.8%-owned Murowa diamond mine in Zimbabwe, total second-quarter mine output was 26,000 carats versus 40,000 carats in the year-ago period.

Rio Tinto comments that both prices and sales volumes for diamonds have been “severely impacted by the economic downturn.”