LONDON (Reuters) – Rio Tinto (RIO.AX)(RIO.L) is exploring for diamonds in Canada as part of its plans to stay in the sector despite the looming closure of its Argyle mine in Australia, known for extremely rare pink diamonds, the firm’s head of copper and diamonds said.
Demand and prices for the wider market have fallen as concerns mount about the world economy, and laboratory-grown gems have added to supply. Colored or particularly large diamonds, however, have held value, especially pink diamonds, 90% of which are produced by Argyle. That mine, the world’s biggest in carat terms, is expected to cease production by the end of next year.
Arnaud Soirat, Rio’s chief executive for copper and diamonds, said pink diamonds had risen in price by 500% since 2000. He gave no figures for the overall market, but producers have reported lower overall demand and prices.
Despite the overall bearish backdrop, Soirat said Rio Tinto planned to stay in diamonds.
“Diamonds is a business we like a lot. It’s a very high-margin business in line with our strategy of value over volume. It makes a lot of sense. We want to stay in the diamonds business,” Soirat said in an interview.
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