Rio Tinto to invest $803 million in Argyle diamond mine

Rio Tinto, the world's third-largest mining company plans to invest $803 million (A$859 million) to ramp up the underground block cave project at its Argyle Diamond Mine in Western Australia.

Argyle is the world's largest producer of pink diamonds producing more than 90 per cent of global supplies of pink diamonds, a gem that is considered trendy in India.

The mine also produces a significant amount of champagne and cognac diamonds, as well as white diamonds.

Rio Tinto had started production from the Argyle mine in 1985 and has since produced more than 760 million carats. It is the largest supplier of gem diamonds to the jewellery market in Japan, southeast Asia and the US.

In 2005, the miner began to construct an underground mine or block cave mine below the existing open pit mine as it is an efficient technique that uses gravity to extract ore with high level of automated mining technology and also extends the life of the mine to at least 2019.

The UK-based company had slowed down the project last year due to the global financial crisis but with the diamond market on the road to recovery, Rio Tinto said that it will ramp up production as it expects strong demand from emerging markets like China and India.