Australian diamond miner Merlin Diamonds plans to re-commence the production at its Borroloola diamond mine located in Northern Territory, Australia by July 2013.

The operations at the mine are being resumed after a decade when it was closed in 2003.

Merlin Diamonds chief executive officer Joseph Gutnick was quoted by Katherine Times as saying that the mine houses potential D and E grade diamonds and is estimated to produce 150,000 carats per year.

Rio Tinto has validated the potential of the mine after identifying Kimberlite sources of diamonds, added Gutnick.

The company is aiming to increase the annual production rate to 250,000 by 2014-end.