Rio Tinto commits $803m to take Argyle underground

14th Sep 2010 07:02

Rio Tinto is spending US$803m (£522m) ramping up the block cave project at its Argyle diamond mine in Western Australia to take advantage of strong demand in emerging markets. The money will finance the move from an open pit operation to an underground mine that'll be up and running in 2013 and extend the mine life to at least 2019. A decision to go underground was first made five years ago.Aussie miner Rio will pick up the pace of construction during the first six months of next year in a bid to meet its production target of nine million tonnes per annum within two years.Argyle, which produces 90% of the world's pink diamonds, slowed down last year due to the financial crisis, but Rio Tinto Diamonds and Minerals chief executive Harry Kenyon-Slaney predicts a "significant" supply gap will emerge in the medium to long term. "The outlook for demand is strong, driven by the growth of emerging markets," he said.Since producing its first diamonds back in 1985, Argyle has yielded more than 760m carats.