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Economy

Rio Tinto becomes sole owner of Diavik, acquiring Dominion’s share


Rio Tinto says it is now the sole owner of the NWT’s Diavik diamond mine after acquiring the 40-percent share held by former Ekati mine owner Dominion.

In a news release on Thursday, Rio Tinto said a transaction to acquire that share had been approved by an Alberta court. The value of the transaction was not given.

The deal ends Dominion’s involvement in the territory’s diamond mines. A year ago, the company owned and operated Ekati and held a significant share in Diavik.

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However, Dominion’s financial troubles – which played out in court over many months – ultimately led to Ekati being acquired by a group of creditors. That mine is now run by a new operator named Arctic Canadian Diamond Company.

What would happen to Dominion’s share of Diavik after the company exited Ekati has remained a question since the beginning of the year.

As a part-owner, Dominion ordinarily paid millions of dollars monthly to help cover Diavik’s running costs. Once Dominion entered creditor protection, Rio Tinto began covering Dominion’s share of those costs. Meanwhile, the share of Diavik’s diamond output that would normally be given to Dominion each month was held back as a form of security.

“Under the terms of the transaction, Rio Tinto has acquired all remaining Diavik assets held by Dominion, including unsold Diavik production and cash collateral held as security for Diavik’s future closure costs,” Thursday’s news release stated.

“In return, Rio Tinto has released Dominion and its lenders from all outstanding liabilities and obligations to fund the operations or closure of the joint venture.”

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Thursday’s announcement is not thought likely to mean any significant change at Diavik, where more than 1,100 people are employed and which is expected to remain an operational mine until 2025.

“Diavik will now move forward with certainty to continue supplying customers with high quality, responsibly sourced Canadian diamonds and making a significant contribution to the Northwest Territories of Canada and local communities,” Sinead Kaufman, Rio Tinto Minerals’ chief executive, was quoted as saying.

“As owner and operator, Rio Tinto is committed to delivering Diavik’s eventual closure safely and responsibly, to leave a positive legacy in consultation with our community and government partners.”

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