Rio Tinto Opens $2.2B Diamond Mine in Argyle That Will Produce 20 Million Carats a Year

Rio Tinto (ASX: RIO) opened on Tuesday its $2.2 billion diamond mine in Argyle, Kimberley, Western Australia with a tradition ceremony to ward off evil spirits.

The site is known for its rare pink diamond. Rio expects to produce 20 million carats of diamond from the mine yearly. About 90 per cent of the global supply of rare pink diamonds is from Argyle.

By expanding from its open pit mine which finishes up in 2013, Rio will move into underground mining and extend the project's life to at least 2020, said Kim Truter, the mines managing director.

Despite the expansion, Rio is still selling the diamond mine, which opened in 1983 and had produced 800 million carats which the miner sold to customers from Japan, the U.S., India, China and in Australia.

In February, Rio logged at full year net loss of almost $3 billion, prompting the miner to initiate a strategic review. Rio is planning a $2 billion float of its entire diamond business, including assets in Canada.