Rio Tinto diamond production up 22% in 2013

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Mining giant’s diamond revenue hits US$852 million, up 14.9%.

Rio Tinto has announced its full-year financial results for 2013, with diamond revenue increasing 14.9% to US$852 million (£510m) and group underlying earnings up 10% to $10.2 billion (£6.1m).

The company’s Diamonds and Minerals sector posted underlying earnings of $350 million (£209m) compared with $149 million (£89.1m) recorded in 2012.

Rio Tinto stated that its polished diamond prices were relatively stable throughout 2013, while slightly greater volatility was experienced in prices for rough diamonds.

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Rio Tinto diamond production increased 22% compared to 2012, with a total 16,027,000 carats of diamonds recovered in 2013. It reported increased tonnes processed and higher grades recovered at its Argyle mine in Australian, following the commissioning of the underground mine in April 2013, and the transition from the open cut mine. The production at Argyle is said to be "ramping up" to full capacity, which will extend the mine life of Argyle until at least 2020.

Rio Tinto’s Diavik diamond mine in Canada also completed the transition to a fully underground mine, with all three pipes now at full production.

Looking ahead to the end of 2014, Rio Tinto has forecast diamond production totalling 16 million carats.

Rio Tinto chief executive Sam Walsh said: "These strong results reflect the progress we are making to transform our business and demonstrate how we are fulfilling our commitments to improve performance, strengthen the balance sheet and deliver greater value for shareholders.

"We have achieved underlying earnings of $10.2 billion, exceeded our cost reduction targets and set production records. In turn, this has enhanced our cash flow generation and lowered net debt. The 15% increase in our dividend reflects our confidence in the business and its attractive prospects."

With regards to its full year 2013 results, Rio Tinto reported operating cash cost improvements of $2.3 billion, exceeded its 2013 target of $2.0 billion. Its exploration and evaluation savings delivered $1 billion, against the 2013 target of $750 million.

Rio Tinto’s cash flows from operations of $20.1 billion were up 22% and capital expenditure was down 26% to $12.9 billion. Net debt reduced to $18.1 billion at 31 December 2013, $4.0 billion down on the half year and $1.1 billion down on the previous year end.
 

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