Rio Tinto said its gross revenue from diamonds grew 15% to $706 million for the year that ended December 31st 2017. Earnings before interest, taxes, depreciation and amortisation (EBITDA) from diamonds rose 20% to $287 million. Net earnings for the year nearly doubled from $47 million in 2016 to $92 million last year.
Capital expenditure on diamonds fell 12% to $85 million in 2017, while the value of its operating assets in the diamond sector plunged 33% to $441 million. The company said that a post-tax impairment charge of $138 million was recognised at Argyle attributable to lower production volumes, a smaller than expected contribution from productivity improvements and lower realised prices.
“Rough diamond demand was solid in 2017: factories in India increased manufacturing capacity as the market normalised following Indian banknote reform in 2016, and the outlook in key emerging markets improved. This resulted in sustained re-stocking activity throughout the pipeline for most of the year,” Rio Tinto stated.
Rio Tinto said diamond production, of 21.6 million carats in 2017, was 20% higher than 2016 with higher carat production at Argyle due to the additional processing of higher grade alluvial tailings, and an increase in carats recovered at Diavik due to higher recovered grades. Development of the A21 pipe at Diavik remains on schedule and within budget, it noted.
Rio Tinto’s diamond production guidance for 2018 is between 17 and 20 million carats.