Rio Tinto Lowers Outlook as Argyle Closure Looms

RAPAPORT... Rio Tinto expects a decline in diamond production in 2020 as it reduces output at its Argyle mine in Australia, which is set to close in the fourth quarter.The company will produce between 12 million and 14 million carats for the year, compared with 17 million carats in 2019, it said last week. The miner also expects to retrieve lower grades at its Diavik mine in Canada, further impacting total output.Production of rough stones from Argyle and Diavik dropped 8% to 17 million carats in 2019, as the company recovered lower-grade ore at both deposits. Output at Argyle slid 8% to 13 million carats for the full year, with the lower grade partially offset by stronger mining and processing rates, the miner noted.Rio Tinto's share of production at the Diavik mine declined 8% to 4 million carats due to less ore availability and a lower grade at the underground portion of the site. However, higher ore volumes and grades at the mine's A21 open-pit extension lessened the drop.Total recoveries dropped 2% year on year to 4.2 million carats for the fourth quarter. A 22% dip to 840,000 carats in the company's share of production at Diavik outweighed a 5% rise at Argyle to 3.4 million carats. Rio Tinto fully owns Argyle, and holds a 60% stake in Diavik, with Dominion Diamond Mines owning the remaining 40%.Image: The Argyle mine (Rio Tinto)