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Rio Tinto announces an extension on Argyle diamond mining
Rio Tinto announces an extension on Argyle diamond mining
 









End extended for Argyle pink diamonds

Rio Tinto has breathed new life into its Argyle mine production – famous for its fancy pink diamonds – by opening a new underground diamond mine in the east Kimberley region of Western Australia.

The move from open pit mining to an underground operation will extend the life of Argyle until at least 2020, the company’s chief executive, Alan Davies, said.

"The new Argyle underground mine has allowed us to extend the life of this iconic asset for Rio Tinto and Western Australia.”

According to Rio Tinto, the average annual production over the life of the $2.2 billion underground mine is likely to be 20 million carats per year, including a small but consistent supply of the world’s rarest pink diamonds.

John Calleija, Calleija Jewellers
John Calleija, Calleija Jewellers
John Calleija from Calleija Jewellers in Sydney, one of only 30 Argyle pink diamond ateliers in the world, told Jeweller that the news of the mine’s extension has the market buzzing.

“It’s good for business,” he said. “There was a lot of uncertainty about whether or not Rio was selling the mine and my clients were constantly asking what was happening.

“We were told not to expect many diamonds for the next 20 months. But now this news is really positive.”

Calleija said that the announcement of the mine’s extension had polarised many of his clients.

“We are seeing clients who were sitting on the fence about whether or not to buy Argyle pink diamonds now beginning to act because they realise that stock will run out.

“I don’t know of anything else in the world as finite as Argyle pink diamonds. And clients are realising the same thing,” he said.

Calleija’s clients are known for conducting their own research and when news like this breaks, often copies of articles arrive in his inbox shortly after, with queries about what Rio means and how will the news impact on the price and/or supply of Argyle pink diamonds, Calleija said.

Michael Neuman from Mondial Neuman Jewellers said a few of his clients had mentioned they saw the news in the mainstream press. It had generated renewed interest in an extremely limited resource, which, he said, will only get scarcer as the years go on.

Michael Neuman, Mondial Neuman Jewellers
Michael Neuman, Mondial Neuman Jewellers
“The underground mine was a decision taken by Rio in 2005 and delayed in 2008 by the GFC,” Neuman said. “It was always on the cards and so it’s not really an extension of mine life, just a confirmation of what was always expected. This confirmation of less than 10 years to go will undoubtedly increase interest and demand for pinks.”

Neuman hadn’t noticed an increase in pink diamond prices as yet as, “we have sufficient stock for the moment and haven’t been looking to buy.”

Calleija added, “In the past, news from Rio [about closing the mine or supply ending] was often met with cynicism. Clients would ask me if I thought Rio was holding back pink diamonds, trying to inflate the price,” he said.

“Now, with this latest announcement, they know that the news is real. The supply really will run out.”

Calleija said the worldwide market was extremely keen to get its hands on the remaining Argyle pink diamonds, forcing up prices.

“At an auction in the US only a few weeks’ back, a half-carat vivid pink sold for $300,000 – a record for a stone that size. It’s a good gauge for how the market is reacting to news like this.

“I had a similar stone in my window selling for less than that. Mind you, it sold fairly quickly after that auction,” he said.

Neuman said anyone considering purchasing pink diamonds should act sooner rather than later. He warned jewellers to be wary of where they purchase their pink diamonds.

“Beware of people claiming to know about pink diamonds who do not carry significant pink stock. To understand them, like anything else, you need to be working with them on a daily basis and over a long period.”

More reading:
$40 million for ancient diamond
What makes pink diamonds pink?
Price of Argyle pink diamonds continues to rise










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Friday, 23 August, 2019 12:48pm
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