SYDNEY-- Rio Tinto PLC approved a $350 million extension at a
remote subarctic diamond mine in Canada that the resources group
controls with Dominion Diamond Corp., saying the move demonstrates
its confidence in future demand for the precious gemstones.
On Thursday, Rio Tinto said the development project at its
Diavik mine involves construction of a fourth pipe, known as A21,
that will help the miners sustain diamond output from the
operation. More than 7,000 carats of diamonds were produced from
the mine site in 2013.
Diavik's diamond reserves are contained in solidified volcanic
pipes of kimberlite, which the miner tunnels through the Earth's
crust to reach and extract the diamond ore.
The Diavik mine, 185 miles northeast of Yellowknife, capital of
Canada's Northwest Territories, has been running since 2003 and
produces diamonds for high-end jewelry in all major consumer
markets around the world, Rio Tinto said. Currently, the mine is
due to operate until 2023.
Production from the new pipe is forecast to begin in late
2018.
"Our decision to invest in the Diavik A21 project reflects our
strong confidence in the diamond sector and in our ability to
compete effectively in the industry," Rio diamonds and minerals
Chief Executive Alan Davies said in a filing to the Australian
Securities Exchange.
The Diavik Joint Venture is 60% owned by Rio Tinto, with
Dominion Diamond owning the remaining 40%.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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