Rio Tinto boosts reserves at Argyle

Rio Tinto (RTP-N) has increased minable reserves at Australia’s largest diamond mine by 45%, extending the life of the operation to 2006 at current mining rates.

The reserve boost at the Argyle mine in Western Australia follows a second stage of development at the AK1 open pit.

Rio Tinto added 22.1 million tonnes at an average grade of 2.9 carats per tonne, bringing the total reserves at AK1 to 71.6 million tonnes at 2.7 carats per tonne. The pipe contains an additional resource of 120 million tonnes of material at 2.8 carats per tonne.

Rio believes these reserves will allow the mine to operate until 2006, and the major is investigating the possibility of underground mining once the surface reserves are depleted.

The mining lease at Argyle expires in 2004, though Rio Tinto can extend this for an additional 21 years.

Situated in the Kimberley region, the mine produced 40.8 million “lower-quality” carats in 1998 — 2% higher than in the previous year. Earnings rose to US$53 million from US$30 million between the two years.

Rio Tinto has a 56.8% interest in the mine, with Australian-listed Ashton Mining holding 38.2% and the Western Australian Diamond Trust, 5%.