Rio Tinto's rough sales increased by 9 percent to $501 million in 2021, as prices rose as a result of a tightening supply and a surge in demand for diamond jewelry.
“We saw a recovery in diamond prices following a pandemic-related buildup of demand and low inventory levels,” Rio Tinto said in a statement on Wednesday.
The division's net earnings totaled $99 million for the year, compared to a loss of $9 million in 2020, when the Covid-19 pandemic hampered sales.
As a result of the company's Argyle mine in Australia's planned closure in November 2020, diamond production fell by 74% to 3.8 million carats in the fourth quarter. Production from Canada's Diavik deposit, on the other hand, increased by 3 percent over the previous year. The increase is due to an increase in Rio Tinto's share of production starting in November 2020, when the company acquired joint-venture partner Dominion Diamond Mines' 40 percent stake in the operation. It was determined that the additional portion of rough was needed to compensate for the mining of lower-grade ore at Diavik.
As a result of Dominion's creditor-protection filing and failure to pay cash calls to support the joint venture, Rio Tinto had to write off $292 million in value from its Diavik joint venture, according to the miner.
Rio Tinto expects to recover between 5 million and 6 million carats in 2022, following the shutdown of Argyle and the completion of its 100 percent acquisition of Diavik.
