Rio Tinto has consolidated its position in the Canadian diamond industry by acquiring the stake it did not already own in the Diavik mine in Canada’s Northwest Territories.
Following the approval of the Court of Queen’s Bench of Alberta, Rio Tinto has purchased Dominion Diamond Mines’ 40 per cent stake in the mine.
This will enable Rio Tinto to capitalise on the mine’s last few years of life, with Diavik’s high-end, predominantly white gem quality diamonds continuing to draw plenty of interest in established and emerging consumer markets.
The company has operated Diavik since production commenced in 2003. Producing 6.2 million carats of rough diamonds in 2020, the mine is expected to be shut down in 2025.
Rio Tinto Minerals chief executive Sinead Kaufman said the transaction gave the company assurance going forward.
“Diavik will now move forward with certainty to continue supplying customers with high quality, responsibly sourced Canadian diamonds and making a significant contribution to the Northwest Territories of Canada and local communities,” she said.
“As owner and operator, Rio Tinto is committed to delivering Diavik’s eventual closure safely and responsibly, to leave a positive legacy in consultation with our community and government partners.”
It comes after Dominion Diamond Mines filed for insolvency protection in April 2020.
Dominion and Rio Tinto were then involved in a lawsuit after Dominion sued Rio Tinto subsidiary Diavik Diamond Mines over its mismanagement of Diavik.
In court documents, Dominion suggested Diavik Diamond Mines showed “willful misconduct and gross negligence” in its operation of the mine.
Acquiring all remaining Diavik assets held by Dominion, the transaction also sees Rio Tinto acquire unsold Diavik production and cash collateral held as security for the operation’s future closure costs.
Dominion and its lenders have been relieved from all outstanding liabilities relating to Diavik’s operation and future closure.
Diavik is approximately 300 kilometres north east of Yellowknife and employs more than 1100 employees, 17 per cent of which are Northern Indigenous people.