Rio Tinto becomes sole owner of Diavik Diamond Mine

Rhea-AI Summary

Rio Tinto has acquired the remaining 40% stake in the Diavik Diamond Mine from Dominion Diamond Mines, making it the sole owner. This move follows the approval from the Court of Queen’s Bench of Alberta and a 19-month process initiated in April 2020 due to Dominion's insolvency. With Diavik’s diamond production expected to end in 2025, Rio Tinto aims to maintain the supply of high-quality Canadian diamonds. The acquisition includes unsold production and cash collateral for future closure costs, while relieving Dominion of outstanding liabilities.

Positive

• Rio Tinto becomes sole owner of Diavik Diamond Mine, enhancing its position in the diamond industry.
• The acquisition allows Rio Tinto to manage operations and closure, ensuring responsible practices.

Negative

• Diavik's production is expected to cease in 2025, potentially affecting future revenue streams.
• The acquisition involves financial implications and liabilities related to the mine's eventual closure.

MONTREAL--(BUSINESS WIRE)-- Rio Tinto has become the sole owner of Diavik Diamond Mine in the Northwest Territories of Canada, continuing its leading role in the Canadian diamond industry.

A transaction has been completed for Rio Tinto’s acquisition of the 40 per cent share held by Dominion Diamond Mines in Diavik, following the Court of Queen’s Bench of Alberta’s approval.

With production at Diavik expected to end in 2025, its high-end, predominantly white gem quality diamonds with Canadian provenance continue to be in strong demand in all established and emerging consumer markets.

Rio Tinto Minerals Chief Executive Sinead Kaufman said: “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. 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.”

The transaction comes after a 19-month process triggered in April 2020 by Dominion Diamond Mines ULC filing for insolvency protection under the Canadian Companies’ Creditors Arrangement Act.

Under the terms of the transaction, Rio Tinto has acquired all remaining Diavik assets held by Dominion, including unsold Diavik production and cash collateral held as security for Diavik’s future closure costs. In return, Rio Tinto has released Dominion and its lenders from all outstanding liabilities and obligations to fund the operations or closure of the joint venture.

Rio Tinto has operated Diavik since production commenced in 2003. Located approximately 300 km north-east of Yellowknife, the mine employs over 1,100 employees, of which 17 per cent are Northern Indigenous people. In 2020, it produced 6.2 million carats of rough diamonds.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211118005696/en/

Please direct all enquiries to media.enquiries@riotinto.com



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Category: Diavik

Source: Rio Tinto

FAQ

What is Rio Tinto's recent acquisition related to Diavik Diamond Mine?

Rio Tinto has acquired the remaining 40% stake in Diavik Diamond Mine, becoming its sole owner.

When is diamond production expected to end at the Diavik mine?

Diamond production at the Diavik mine is expected to conclude in 2025.

How has Rio Tinto strengthened its position in the diamond market?

By acquiring full ownership of the Diavik Diamond Mine, Rio Tinto enhances its market share and operational control.

What financial liabilities did Rio Tinto take on with the acquisition of Diavik?

Rio Tinto has assumed obligations related to the mine's closure costs while relieving Dominion of its outstanding liabilities.

What steps did Rio Tinto take to acquire the remaining share of Diavik?

The acquisition followed a court approval after a 19-month process due to Dominion's insolvency.