Argyle Production Declines
Rio Tinto has lowered its estimate of the mineral resources available at its Argyle diamond mine in Australia, as the company reconsiders its plans to extend the project.
Estimated mineral resources fell 66 percent to 15 million tonnes in 2016, compared with the previous year, the miner said in a statement last week. Mineral resources are the quantity of material in a mine that has reasonable prospects for being extracted economically.
Previous estimates had taken into account the possibility of prolonging the mine’s planned lifespan, the company explained.
“As mine-life extension options are under ongoing review, the reported mineral resources have now been restricted to those parts of the mineralization which can be potentially developed, mined and processed during the existing mine life defined by the current underground operation,” the company said.
The reduction in resources does not affect the current plan for the mine, which would see production continue until 2021, the company added.
Hong Kong Show
The Hong Kong show was better than expected for the diamond trade, as Chinese jewelers were looking for goods after being absent from the market for some time. But while exhibitors were simply happy to be doing business again, conditions ultimately favored buyers.
Suppliers took the opportunity to reduce stock and generate some cash flow, and they were therefore prepared to accept offers at slightly higher discounts in certain categories.
“There are a lot of goods on the market and a definite hunger to sell,” noted a Jakarta-based jeweler looking to buy at the Diamond, Gem & Pearl Show. “You feel there is flexibility among suppliers.”
Manufacturers’ profit margins remain tight, after rough prices firmed in the first two months of the year and polished prices softened slightly. Therefore, suppliers were hoping the show would stimulate stronger polished trading for the coming months. After all, the first quarter is supposed to be an upbeat period for diamond dealers – a time when jewelers in the U.S. and China restock after the Christmas and Chinese New Year periods.
While that inventory replenishment hasn’t yet happened in a significant way, there was sufficient activity at the show to inspire optimism about the short term.