Resurgent Rough Market Boosts Rio Tinto Revenue

RAPAPORT... Rio Tinto's diamond revenue rose 15% to $706 million in 2017,as global rough demand increased and Indian manufacturers replenished stockfollowing demonetization. Profit in the diamond unit almost doubled over the previous year, climbing 96% to $92million. Earnings before interest, tax, depreciation and amortization (EBITDA)grew 20% to $287 million. "Rough diamond demand was solid in 2017," the company said Wednesday. "Factories in Indiaincreased manufacturing capacity as the market normalized following Indianbanknote reform in 2016, and the outlook in key emerging markets improved. This resulted in sustained restocking activitythroughout the pipeline for most of the year." In November 2016, the Indian government canceled much of thenation's currency, causing many companies to reduce rough purchases significantlytoward the end of the year. Efforts to replenish inventory in the first quarter of 2017led to a rise in revenue for mining companies. Rio Tinto's diamond production grew 20% to 21.6 millioncarats during the year, with higher output at both its Argyle and Diavik mines.The company plans to reduce production in 2018 to between 17 million and 20 millioncarats. Rio Tinto operates the Argyle diamond mine in Australia,which produces exceptional pinks, as well as high volumes of lower-quality rough stones. The comapny also ownsa 60% stake in the Diavik mine in Canada, in partnership with Dominion DiamondMines.