Rio Tinto Confident Trade Jolts Won't Rub Shine Off Rare Diamonds
12 July 2018 - 2:29PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--Rio Tinto PLC (RIO.LN) expects the high-end colored
diamonds its sells from an Australian mine to sidestep the
volatility facing broader commodity markets as a trade battle
intensifies.
Chief Executive Jean-Sebastien Jacques said he expects strong
demand and better prices versus last year for stones being sold in
Rio Tinto's annual Argyle pink diamonds tender, interest for which
is typically greatest in the U.S. but within a niche, "connoisseur"
market.
"Are we concerned about the market at this point in time, either
in the U.S. or in other parts of the world, the answer is no," Mr.
Jacques said in an interview on Thursday.
A selloff in metals and other commodities has intensified this
week, as the latest tariff threats from China and the U.S.
amplified fears a trade fight could slow commerce and weaken
economic growth.
But Mr. Jacques said the small colored-diamond market should be
insulated and that Rio has "high expectations" for its 2018 sales,
which include 63 rare pink, red and violet diamonds totaling 51.48
carats.
Rio Tinto last year said its 2017 tender fetched a record value,
without disclosing prices.
Pink diamonds have previously sold for as much as US$2.2 million
per carat. Rio's diamond sales this year will include the largest
vivid pink diamond ever sold via the Argyle tender, a 3.14-carat
stone, as well as a 2.28-carat purplish red diamond that will also
be the largest of its kind.
The nearing closure of Rio Tinto's 34-year-old Argyle mine,
which produces almost all the world's pink, red and violet
diamonds, is expected to increasingly underpin demand, said Mr.
Jacques.
"People know that maybe we will have another two or three of
those tenders before the mine closes," he said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
July 12, 2018 00:14 ET (04:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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