Rio Tinto today released its annual results for 2018 reporting a 15% dip in diamond production and a marginal 1.56% dip in revenue from diamonds, with a 28.2% rise in profitability from the segment.

Gross revenue from the diamond business dropped from US$ 706 million in 2017 to US$ 695 million in 2018. While earnings before interest, tax depreciation and amortisation (EBITDA) rose by 4.88% in 2018 to US$ 301 mn (2017: US$ 287 mn), net earnings jumped by 28.2% during the past year, rising to US$ 118 million (2017: US$ 92 mn), Rio Tinto said.

Production at the 100% owned Argyle mine in Australia and from its 60% share in the Diavik mine in Canada dropped by 15% from 21.6 million carats in 2017 to 18.43 mn carats in 2018, the miner said This included an 18% drop in carats at Argyle, as in 2017 the company had enhanced production by processing higher grade alluvial tailings, and a 3% fall at Diavik, where lower recovered grades were partially offset by higher ore processing.

An important milestone was achieved at Diavik, with the development of the fourth diamond pipe, A21, being completed within budget and ahead of schedule. The pit has now reached full production following four years of construction and a US$ 350 million investment, Rio Tinto said.

Commenting on the past year, Rio Tinto said that there was a reduction in miners’ inventories over the first half, coinciding with improved prices. However, in the latter part of 2018 there was an increase in inventories, predominantly of lower quality rough diamonds. This led to a softening of prices, particularly in lower-end categories.

Emphasising that the trend seen in 2018, where global supply of natural rough diamonds was lower than the previous year, is expected to continue into 2019, Rio Tinto said that its production guidance for this year was between 15 - 17 million carats.