Rio Tinto not to pursue control of Diavik Mine

Alex Shishlo

Australian-British Rio Tinto has ceased speculation about the possible acquisition of Dominion Diamond Mines’ 40% share in the Diavik mine in Canada’s Northwest Territories, which would become wholly-owned by the world’s leading mining company, according to the Diamond Loupe.

Rio Tinto controls 60% stake in Diavik.

In 2019, Diavik processed 6.7 million carats of diamonds, but the mine’s life span will be over in 2025, with cleanup costs estimated at $365.3 million.

On June 16th, Dominion sued Rio Tinto’s subsidiary, Diavik Diamond Mines Inc. (DDMI) for alleged breach of contract and actions contrary to the interests of the partnership. DDMI manages the Diavik mine, while Dominion covers its 40 percent share of the costs. Partners sell their shares of mined diamonds separately.

DDMI has continued to maintain full operations at the Diavik mine without taking into account the disruptions to the diamond industry caused by the COVID-19 and, in particular, without taking into account Dominion’s circumstances,” the suit alleges. “DDMI has done so knowing that Dominion has no ability to pay for such cash calls because it cannot materially monetize diamond inventories to pay for them,” it notes.

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Source Rough & Polished