Rio Tinto Slashes Argyle Outlook

RAPAPORT... Rio Tinto has lowered its estimate of diamonds it can viably extract from the Argyle mine, after experiencing operationaldifficulties and reducing its price forecast. The asset's ore reserves slumped 45% to 16 million tonnes atthe end of 2017 versus a year earlier, the company said in a statement lastweek. That translates to 38.5 million recoverable carats, at a grade of 2.4carats per tonne of ore. Reserves are the economically extractable materialpresent in a mine, and are distinct from resources, which refer to alldeposits. The decrease includes almost 5 million tonnes of ore thatRio Tinto depleted during the year at the mine in Australia. It comprises afurther 3 million tonnes due to reduced production outlook resulting fromoperational challenges in 2017, it said. Rio Tinto also cut its price expectation for the mine for2020 and 2021, resulting in a higher "economic shut-point" - the minimum volumeit must produce per quarter for operations to be worthwhile. This, combinedwith adjustments to its estimates of future mining grades, shaved just over 5million tonnes off its reserves. The available reserves will enableArgyle operations to continue until 2020. The company could increase theestimate and extend the life span beyond that, depending on how the mineperforms, it added.Image: Rio Tinto