An ethical approach

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 31 Oct 2016   Posted by admin


The Argyle pink Jubilee diamond, weighing in at 12.76 carats, was the biggest pink rough diamond ever discovered in Australia. Image: Rio Tinto.

 

By  Elizabeth Fabri

 

NOTHING exudes class and timeless beauty like an Argyle diamond. While the majority of the mine’s production are champagne and cognac in hue, on much rarer occasions Rio Tinto will unearth one of its famous pink stones.

The spectacular and rare coloured diamonds found at Rio Tinto’s Argyle mine are synonymous with the Kimberley region’s vividly painted landscapes.

Since the mine began operating in 1983, Rio Tinto has produced more than 800 million carats of rough diamonds through its 11 million tonnes per annum processing facility, with its name now in lights as the world’s primary supplier of rare pink diamonds, and largest supplier of natural coloured diamonds, predominately champagne and cognac.

Mining was originally conducted via alluvial and open pit methods, but in recent years underground mining had taken the lead.

In 2013, mining of the AK1 pit took over to access the pipe at a further depth through block cave mining techniques.

“Argyle became a fully operational underground operation in 2015 and on current predictions has a mine life through to around 2021,” Argyle’s managing director Andrew Kite said.

“Our operations focus remains on delivering returns to shareholders through the safe operation of the world class underground Argyle diamond mine.”

In the first half of 2016, Argyle production increased to 6.9 million carats; a four per cent increase on 2015 results which was attributed to an underground ramp up.

The results followed Argyle’s strong 2015 finish, which delivered a massive 47 per cent increase in carats compared to 2014.


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When open-pit mining was completed in 2013, Argyle transitioned to underground mining. Image: Rio Tinto.


Argyle Pink Diamonds Tender

In May, Rio Tinto unveiled its largest violet diamond discovered from Argyle yet; a 2.83 carat polished oval shaped diamond, called The Argyle Violet.

Following its release, the ‘impossibly rare’ diamond formed the centrepiece of the 2016 Argyle Pink Diamonds Tender.

The annual tender is considered one of the most exclusive diamond sales in the world, showcasing Rio Tinto’s rare discoveries from pink diamonds, to yellow, red, grey, blue, and violet stones.

The first tender, held in 1984, was made up of 33 stones at a total weight of 18 carats, and today showcased between 50 and 60 stones each round.

The coveted collection travelled around the world once a year for private tender viewings, with prices soaring to the millions of dollars per carat.

This year’s Chroma Collection incorporated 57 pink diamonds, two violet diamonds, and four red diamonds at a combined weight of 58.24 carats.

The five hero diamonds from the 2016 group included the stunning 2.83 carat Argyle Violet oval diamond; 1.11ct Argyle Ultra violet pear-shaped; 1.21ct Argyle Viva, a purple-pink pear stone; 2.24ct Argyle Thea, a purple pink radiant; and the 1.09ct Argyle Aria red oval diamond.

In June, the tender was previewed in Copenhagen, and had since travelled to Hong Kong, New York, London and Perth.

Bidding closed on 12 October, with tender results soon to be released.


Partnership with China

In the last five years, China has been a significant market for Argyle’s smaller affordable diamonds used in fashion jewellery, but only recently has consumer interest in a diamond’s origins taken precedence.

Most buyers now wanted to know where and how their diamond had been produced, and whether it had been mined in an ethical manner.

On 2 August, Rio Tinto launched the Australian Diamonds program in China to provide a clear and transparent supply chain for its overseas market, which was predominately focused on its champagne coloured stones.

“We established our presence there in 2010, with a focus on developing the emerging diamond fashion jewellery market, ideally suited to the small, affordable Argyle diamonds,” Rio Tinto’s vice president of sales and marketing for copper and diamonds Simon Farry said.

“Our Australian Diamonds program is all about expanding the fashion jewellery market by encapsulating the essence of the birthplace of Argyle diamonds into jewellery.

“Our market research indicates that a diamonds birthplace, its provenance and its pedigree is increasingly important to consumers around the world.”

From 2016, all Rio Tinto global marketing activities would focus on diamonds that were tracked from the source with a clear ‘Chain of Warranty’ system developed with independent auditors to ensure traceability at all stages of the pipeline with certificates of authenticity.

“Rio Tinto is well positioned to respond to the growing market interest in diamond provenance as we have always segregated our diamonds productions, selling by mine and country of origin,” Mr Farry said.

“We want all of our customers to be confident that the journey their diamond makes from the mine to the market is a worthy one: that landscapes and cultures are treated respectfully; that local communities around our mine sites prosper; that safe and fair working conditions are provided to our employees; and that we deal honestly and fairly with our industry partners.

“In China, our Australian Diamonds program promises a deep authenticity, and is inspiring and informing the Chinese diamond jewellery markets, from designers and artists, through to retailers and ultimately consumers – the rugged Australian landscape, a rich heritage and raw luxury is being distilled into chic and sophisticated jewellery collections.”


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Rio Tinto’s Australian Diamonds program in China will provide a clear and transparent supply chain for its overseas market. Image: Rio Tinto.


Global demand

More than half a billion men and women in the world own at least one piece of diamond jewellery, and global interest is certainly not dwindling.

“As they have done throughout the centuries, diamonds continue to enthral us with their beauty and mystique,” Rio Tinto energy and minerals chief executive Alan Davies said earlier in the year.

“Given their pure and ancient provenance, and their inevitably diminishing availability, it is hard to imagine that our passion for diamonds will ever fade.

“What is shifting rapidly, however, are expectations of the diamond business as new generations heed the call to live more thoughtfully and ethically, to protect the long term future of our planet.”

Rio Tinto had been involved in the diamond industry for almost 40 years, and today had a 100 per cent interest in Argyle, and 60 per cent stake in Diavik mine in Canada.

Most of the Argyle’s produce was sent over as rough diamonds to Rio Tinto’s Diamonds Sales and Marketing office in Belgium, while its pink stones were retained for cutting and polishing, before sold to an international customer base.

“With regard to pink diamonds, the Argyle mine produces virtually the entire world’s supply of pink diamonds, and yet less than 0. 1 per cent of Argyle’s production comprises pink diamonds,” Mr Farry said.

“Pink diamonds comprise a quite separate market to all other diamonds.

“This has driven, and continues to drive, increased demand and sustained value appreciation.”

As Argyle neared the end of its operating life, with only five years left according to current estimates, global demand for Argyle’s diamonds was expected to soar.