Star Diamond Sues Rio Tinto over Canadian Diamond Venture

By John Jeffay / March 10, 2020 / www.idexonline.com / Article Link

(IDEX Online) - Star Diamond Corporation is to sue Rio Tinto over a joint venture, accusing it of "bad faith predatory practices".The two Canadian companies joined forces in 2017 to establish Star-Orion South, the first commercial diamond in Saskatchewan province.But Star Diamond, the smaller partner in the agreement, claims Rio Tinto has overspent on exploration, failed to share "any meaningful data", and was now trying to gain a controlling stake in the project.Rio Tinto, one of the world's largest metals and mining corporations, gave notice last November that it wanted to purchase a 60% stake in the site.It said it planned to exercise all of its options under the seven-and-a-half-year deal, and spend $75 million to acquire a controlling stake, well before it was required to make a decision.Star Diamond, a Canadian natural resource company founded in 1985, said in a statement that it had commenced legal proceedings in the Court of Queen's Bench for Saskatchewan against Rio Tinto Exploration Canada Inc, saying it was is committed to enforcing its rights under the Joint Venture Agreement.According to the local Saskatoon Star Phoenix newspaper, Star Diamond's lawyers said drilling results "must have persuaded (Rio Tinto) that the properties have significant commercial value."Rio Tinto's conduct "is deliberately calculated to take advantage of Star Diamond's position as the smaller joint venture partner ???,? ? with the ultimate goal of allowing (Rio Tinto) to acquire a greater participating interest for its own benefit," the claim states.Star Diamond, formerly Shore Gold Inc., had been working to build the mine since 1995, before entering the joint venture with Rio Tinto.Rio Tinto said the matter was subject to legal proceedings. "We will be strongly defending the legal proceedings on the basis that we have validly exercised the options," a spokesman said.

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