Rio Tinto names Shell’s Katie Jackson as new copper chief
Jackson, who is the current president of National Grid Ventures, an energy group, joins Rio Tinto on September 1.
Canada’s Lucara Diamond (TSX:LUC) shares went down over 3% on Friday after the company said it expected to sell 23% less diamonds this year from its flagship Karowe mine, in Botswana.
The miner, whose shares closed at $0.61, blamed a water shortage hampering recovery and lower grades being fed through the mill for the gloomy outlook.
The sales forecast for the year was reduced from 300,000 carats to 230,000 carats while the production guidance was also reduced from 300,000 carats to about 270,000 carats.
The Toronto-based miner also said its second-quarter net loss widened to was $7.6 million from $5.9 million in the year ago quarter, reflecting increased administration expenses and foreign exchange losses during the second quarter of 2012.
Exploration expenditure for the quarter declined to $2.8 million from $2.9 million last year.
President and Chief Executive Officer, William Lamb, said in a statement the first half of 2012 saw Lucara transitioning from development stage to a producing mining company. He pointed the diamond markets were challenging for all producers.
“We are focussed on sustainable levels of production, cost control and diamond quality. We continue to believe that the medium to long term fundamentals of the diamond sector remain strong with demand outpacing supply, resulting in future price improvement,” Lamb said.
The world of diamond mining is undergoing fundamental changes.
BHP, the globe’s biggest mining company, launched a review of its diamond operations late last year with an eye to sell most or all of its assets. BHP has already off-loaded its Chidliak exploration project in Canada to Peregrine Diamonds.
Rio Tinto followed in March saying that it was reviewing its gem business, potentially selling it all off.
It seems like the diamond business may simply be too small for the mining giants. Rio Tinto’s diamond mines contribute less than 2% to its earnings and it’s a small proportion of BHP’s income as well.
Apart from the changing strategy of BHP and Rio, the founding family of De Beers recently sold out completely from the company synonymous with diamonds after three generations steering the business. The $5.1 billion deal, announced in November, was completed early this month.
Russia’s Alrosa overtook De Beers in 2009 as the world’s number one supplier of rough gems after decades of being a secretive, state-owned organization in the process of readying for a global public offer.
Comments
Sharon
If BHP is selling then that is a sure sign that the diamond mining industry is undergoing changes for sure.