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The Diavik Helios, a 74.48-carat fancy yellow diamond mined in Canada, is Lot 1 in Rio Tinto's new Specials Tender of large diamonds. Image credit: Rio Tinto
The Diavik Helios, a 74.48-carat fancy yellow diamond mined in Canada, is Lot 1 in Rio Tinto's new Specials Tender of large diamonds. Image credit: Rio Tinto

Rio Tinto announces new diamond tender; mining partner on verge of collapse

In addition to its annual Argyle Tender of pink, red, and blue diamonds, Rio Tinto has begun a separate tender for large stones weighing 10.8 carats or more, including a fancy yellow from Canada.

The ‘Specials Tender’ represents the final sale of rough diamonds from the Argyle Mine in Western Australia, which is due to close at the end of 2020.

Approximately 28,399 carats of rough – including both fancy colours and a 26-carat gem-quality white stone – are on offer.

Patrick Coppens, general manager sales and marketing, Rio Tinto diamonds
Patrick Coppens, general manager sales and marketing, Rio Tinto diamonds
“The Diavik Helios is an exceptional diamond in terms of its colour saturation and clarity and will be in strong demand from coloured diamond specialists around the world”
Patrick Coppens, Rio Tinto

Andrew Wilson, general manager, Argyle Mine, said, “The Argyle rough diamonds presented at this tender are a final rare and collectible offering from one of the world’s greatest diamond mines.”

Lot 1 of the Specials Tender is the Diavik Helios. Originating from Rio Tinto’s Diavik Mine in Canada’s Northwest Territories, the 74.48-carat fancy yellow diamond is named for the ancient Greek sun god.

Patrick Coppens, general manager – diamond sales and marketing, Rio Tinto, said, “Since the Diavik Mine began production in 2003, it has produced on average only five large yellow diamonds each year – in effect, less than 0.001 per cent of Diavik’s annual production.”

“The Diavik Helios is an exceptional diamond in terms of its colour saturation and clarity and will be in strong demand from coloured diamond specialists around the world,” he added.

Bids for the Specials Tender are due to close on 9 November, and the collection will be shown in Antwerp and Tel Aviv as well as online.

Complications continue in Canada

Notably, Rio Tinto recently applied to a Canadian court for permission to sell its beleaguered junior partner’s portion of Diavik rough, which it had been holding as collateral.

Dominion Diamond Mines, which controls a 40 per cent stake in the Diavik Mine, has faced severe financial difficulties due to the COVID-19 pandemic and filed for insolvency protection in April.

Its interim CEO, Patrick Merrin, stepped down on 20 October following the collapse of a CAD126 million ($AU134 million) restructuring plan, which would have sold its 90 per cent interest in another Canadian diamond mine, Ekati, to an affiliate of its parent company.

Dominion’s previous CEO, Shane Durgin, resigned in February.

“During recent months, Dominion has faced unprecedented challenges stemming from the COVID-19 pandemic and global shutdown of diamond sales. Unfortunately, the recent development with the sale process will force us to conserve cash as much as possible”
Dominion Diamond Mines spokesperson

A spokesperson for Dominion told Rapaport News, “During recent months, Dominion has faced unprecedented challenges stemming from the COVID-19 pandemic and global shutdown of diamond sales. Unfortunately, the recent development with the sale process will force us to conserve cash as much as possible in the near term, which could mean extending furloughs or making permanent layoffs.”

In its court filing, Rio Tinto subsidiary Diavik Diamond Mines (DDM) – which controls the majority of the Diavik Mine as well as day-to-day operations – noted that Dominion owed it CAD121.9 million ($AU129.8 million).

“Dominion has not repaid the… payments, or any portion thereof, and has no intention of doing so. It would be unjust and inequitable not to permit DDM to recover amounts owing to it [by selling the rough],” the filing asserted.

Dominion filed documents in June alleging DDM had breached the terms of the joint venture agreement, which Rio Tinto strenuously denied.

A hearing on Rio Tinto’s rough sale application is scheduled for 30 October. Dominion will remain under insolvency protection until 7 November.

 

More reading:
2020 Argyle Tender diamonds revealed
Rio Tinto faces further legal challenges in Canadian mining venture
Rio Tinto embroiled in legal battle with mining partner











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