Rio Tinto Diamond Unit Reports Significant Loss Amid Market Slowdown

Rio Tinto’s diamond division has reported a loss for the first half of 2024, driven by decreased production and a global downturn in diamond demand. 

Financial Performance

Rio Tinto’s diamond revenue fell by 40% year-on-year, totalling $149 million for the six months ending June 30. This decline led to an underlying loss of $65 million for the diamond unit, compared to the $44 million profit recorded in the same period the previous year. The overall profit for Rio Tinto, however, saw a 15% increase, reaching $5.8 billion, highlighting the contrast between its diamond operations and other sectors.

Production and Market Impact

The Diavik mine, wholly owned by Rio Tinto, experienced a 25% reduction in rough diamond production, with output dropping from 1.924 million carats to 1.441 million carats. This reduction in volume is partly due to operational challenges and a plane crash in January, which caused a temporary halt in operations. The accident, involving a Jetstream twin turboprop airliner, resulted in the loss of six lives, including four workers and two crew members.

The global diamond market has seen a slowdown in rough diamond demand, contributing to Rio Tinto’s diminished sales. Polished diamond sales have also been sluggish, leading to increased midstream inventories. The broader industry context of declining demand and oversupply has also contributed to the financial struggles faced by Rio Tinto’s diamond unit.