Rio Tinto Diamonds’ diamonds operations incurred a loss of $68 million in 2009, compared with earnings of $137 million in 2008. Lower prices and lower volumes as a result of the global economic slowdown were the main cause. Measures were taken to redress this performance including shutdowns at Argyle and Diavik to balance production with market demand. Following a recovery in market conditions, a scheduled six week winter shutdown at Diavik was cancelled.
As for the diamond market, both prices and sales volumes for diamonds have been severely impacted by the global economic downturn. The effect on the rough diamonds market has been exacerbated by the lowering of inventory levels in the diamond pipeline, resulting from reduced global liquidity. However, there was an improvement in prices for rough diamonds in the latter half of 2009.
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