Rio Tinto Approves Argyle Underground Mine

December 8, 2005

Rio Tinto Approves Argyle Underground Mine

Rio Tinto will develop a $760 million block cave underground project at its wholly owned Argyle diamond mine in the Kimberley region of Western Australia. An additional $150 million will be spent on a related open pit to enable continuity of production between the cessation of open pit mining in 2008 and the ramp up of the underground mine. The news is significant to Indian diamond cutters supplied by the mine and fancy color diamond collectors, due to the mine's yield of these rare stones.

Construction of the underground mine will begin once government approvals are final. The average annual production over the life of the underground mine from 2007-2018 is expected be around 60% of Argyle's historical annual average of 34 million carats and of similar quality.

"This investment springs from Rio Tinto's proven capacity to develop large scale underground mines and to compete successfully in the global diamond business," said Rio Tinto Chief Executive Leigh Clifford. "It will allow the Argyle mine – the world's largest diamond mine – to operate beyond 2008. Furthermore, it will ensure that the mine's high levels of Indigenous employment will continue to deliver economic and social benefits to the Kimberley region."

"The Argyle brand and its signature stone, the pink diamond, will continue to play an important role in the world diamond market. This is a particularly good decision for the East Kimberley area, the Indian cutting and polishing industry and the affordable fashion jewelry industry, each with a degree of dependence on the Argyle business," said Keith Johnson, chief executive of Rio Tinto Diamonds.

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