The mining major plans to undertake a near-term review of its alternatives regarding the Canadian diamond project
Rio Tinto has decided to put the Star–Orion South diamond project in Canada under care and maintenance for the rest of the year, said its joint venture partner Star Diamond.
In this regard, the mining major’s subsidiary Rio Tinto Exploration Canada had exercised its voting power.
Rio Tinto and Star Diamond are in a 75:25 joint venture called Fort à la Corne for the diamond project located in Saskatchewan.
Star Diamond said that Rio Tinto does not plan to commit additional capital to the Star–Orion South diamond project this year beyond what is required for care and maintenance.
Rio Tinto also told the company during a joint venture management committee meeting that it intends to carry out a near-term review of its alternatives pertaining to the Canadian diamond project. The alternatives include a possible exit from the joint venture.
Star Diamond stated: “The board of directors of Star Diamond is disappointed by these decisions. Star Diamond intends to work with Rio Tinto in assessing alternatives regarding the Project.”
The Star–Orion South diamond project is located in central Saskatchewan, nearly 60km east of Prince Albert. The project involves a total capital cost of C$1.87bn ($1.45bn), which includes a pre-production capital cost of C$1.41bn ($1.09bn).
In 2018, Star Diamond announced the results of a preliminary economic assessment (PEA) on the Star and Orion South kimberlites in the project. As per the PEA, an estimated 66 million carats of diamonds can be recovered in a surface mine over a project life of 38 years.
Earlier this month, Rio Tinto had drawn the first ore from the Gudai-Darri iron ore mine in the Pilbara region in Western Australia.