Mining company Rio Tinto reduces estimate of mineral resources at Argyle diamond mine

By @shauryaarya1 on
Rio Tinto (2)
A sign adorns the building where mining company Rio Tinto has their office in Perth, Western Australia, November 19, 2015. Reuters/David Gray

Rio Tinto is considering whether to extend the project at Argyle diamond mine, Western Australia. In light of this development, the mining company has reduced its estimate of the mineral resources at the mine.

In a statement issued last week, Rio Tinto said estimated mineral resources – the volume of material that can be extracted for economic purposes – slumped by 66 percent to 15 million tonnes in 2016. The mining company said the reduction comes in the wake of “the ongoing review of potential mine-life extension options and restricts reported resources to that component of the known mineralisation which may be developed, mined and processed within the current operational mine life.”

Rio Tinto’s current mining plans, which include production at Argyle mine until 2021, will continue as scheduled. Argyle mine’s reserves contain as much as 29 million tonnes of ore. Last year, Rio Tinto processed 5.1 million tonnes.

“As mine-life extension options are under ongoing review, the reported mineral resources have now been restricted to those parts of the mineralization which can be potentially developed, mined and processed during the existing mine life defined by the current underground operation,” the company said.

The company will be constructing a second cave at Argyle, although it has not revealed the cost for the same. In its annual report, Rio Tinto said the company’s 40 percent share of pre-production construction of a new block cave at the Grasberg copper-gold mine in Indonesia amounts to US$200 million.

In 2016, Rio Tinto’s earnings attributed to its diamond operations amounted to US$47 million – a decline of almost 40 percent from US$79 million in the previous year. The company has 60 percent holding in Diavik diamond mine in Canada.

Meanwhile, the mining company is terminating more jobs and cutting down production at the Boyne aluminium smelter in Gladstone, Queensland. As a result of sustained increase in power prices, output at the operation will be brought down by as much as 14 percent, as noted by Reuters. More than 100 jobs will be lost by the move.

Production at the swelter will be cut down by eight percent, the mining company said in January. Boyne Smelters said in a statement that full production was not achievable due to high power prices, which have been almost three times than that in 2016. A previous estimate accounted for 50 job losses. However, due to increasing power prices, the operations have been heavily affected – leading to more than doubling of job losses.