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Not only were diamonds uncovered in extremely large quantities – the resulting Argyle diamond mine doubled world diamond production in its first few years of operation – but the discovery also effectively rewrote geological record books.

Today, the Argyle mine is the world’s largest supplier of coloured diamonds, including the rare and highly-coveted Argyle pinks. It continues to generate significant economic opportunities, locally and in India, where some 300,000 people are employed in the state of Gujarat to cut and polish its plentiful gems. Further downstream the flow-on effect in value addition includes jewellery designers, manufacturers and retailers.

With its recent transition from open pit to underground mining to extend its life until 2020, the Argyle mine continues to deliver enormous value to Rio Tinto and the wider diamond world.

A new diamond frontier

When Ewen Tyler was a geology student at The University of Western Australia in the 1940s, kimberlite was then the only known host rock for diamonds. However, Tyler was intrigued by the observations of his geology professor, Rex Prider, that lamproitic minerals found in the Kimberley region of Western Australia bore a strong resemblance to those accompanying diamond discoveries in South Africa.

Returning to Australia in the late 1960s after a decade working in mining exploration in Africa and Europe, Tyler was keen to test Prider’s theory that lamproite might also be a host rock for diamonds. He formed the Kalamburu Joint Venture – a group of five companies – to begin commercial exploration for diamonds in the Kimberley on a modest budget of A$100,000. The other team members were encouraged by the fact that the geology and structure of the Kimberley bore a strong resemblance to South African diamond areas.

Argyle factfile

Argyle factfile

Discovery of AK1 pipe October: 1979

Discovery of AK1 pipe October: 1979

Started production:

  • Alluvials: 1983
  • Open pit: December 1985
  • Underground block cave: April 2013

Deposit type: Tier 1

Expected mine life: At least 2020

Ownership: 100% owned and managed by Rio Tinto

Production rate: 20 million carats per annum, on average, over the life of the block cave

Largest pink diamond recovered from Argyle: 12.76 carats rough pink diamond, The Argyle Jubilee

Image: View looking eastwards over site of main plant and proposed tailings area, Argyle Diamond mine, Western Australia c. 1985.

The search began in 1972, with the team’s geologists charged with the enormous task of sampling sediments from all the creeks and rivers in the Kimberley – a vast and isolated region roughly the size of the British Isles. The hope was that if there was an exposed diamond pipe, it would have been crossed by creeks or rivers during the region’s pronounced wet season and at least some speck of indicator minerals would have been washed downstream as it eroded. Helicopters were employed to transport the sample teams across this vast and rugged landscape.

By early 1974, indicator minerals and diamonds had been found in samples from the north, east and west Kimberley and the joint venture group decided it needed more resources to intensify its exploration. A timely meeting between Reece Towie (head of venture participant Northern Mining) and John Collier, who was head of exploration for CRA Ltd (later to become Rio Tinto Ltd) helped to secure CRA’s participation in the project under the new name of the Ashton Joint Venture. Collier, who had had great success in opening up CRA’s giant Hamersley iron ore project in Western Australia, was an important champion of the diamond project, ensuring that the best equipment and resources were made available to continue the search in earnest. In return for its A$1.65 million investment, CRA acquired 35 per cent ownership of the venture; by 1982 this had increased to 56.8 per cent.

20 million

carats per annum, on average, over the life of the underground mine

Opening the jewel box

Clear objectives were set for the search: firstly, to find a diamond larger than a quarter of a carat; secondly, to find a diamond-bearing pipe; and, thirdly, to establish that the pipe was of a diamond grade high enough to justify a mine.

The first objective was reached in July 1976 when a diamond of more than a quarter of a carat was found in the King George River in the north Kimberley, although the second objective had already been achieved with the discovery of a diamond-bearing pipe – Big Spring No 1 – at the remote site of Mt North Creek.

Bulk testing of this pipe and four others found nearby in 1977 disappointingly revealed diamonds of only very small size. However, the sampling did turn up some important new geological information: in contrast to the South African diamond finds, chromite was revealed as an indicator mineral for diamonds in Australia and lamproite was indeed the host rock for the diamonds. Rex Prider’s theory had finally been proven.

While samples from the west Kimberley eventually led to the discovery of 49 lamproite pipes, and a central treatment plant was built to recover some 92,000 diamonds, it was determined that the grade of these deposits was not quite high enough to warrant establishing a mine.

Happily, further exploration in the eastern part of the Kimberley was to deliver on the search’s third objective. Sampling of Smoke Creek – running some 35 kilometres from the Matus Range to Lake Argyle – revealed not just the usual indicator minerals for diamonds, but whole diamonds. Indeed, members of the venture team were astonished to find up to 15 diamonds in their pan when they sieved gravel from certain parts of the creek and fittingly dubbed it “the jewel box”. Initial fears that the diamonds might just be alluvial were allayed when a sizeable lamproitic host pipe, later to be named AK1, was discovered.

Over the next three years, deep drilling was carried out to fully evaluate the pipe and confirm that it was indeed commercially viable. Open pit mining commenced in December 1985 and while the diamonds unearthed were of much lower value than world average, the volumes were immense and the grade was of a richness that would rewrite geological textbooks. Argyle would become one of the world’s largest producers of diamonds and its largest supplier of natural coloured diamonds, including white, champagne, cognac, blue and the highly-coveted rare pink diamonds.


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Geologist technician Michael Silcock operates a down-hole loggger designed to collect geophysical data by probing down a drill hole. 1981.

Value underground

After close to 30 years of open pit mining, the Argyle mine went underground in April 2013. A decision to construct an underground block cave mine followed extensive studies by Rio Tinto. The underground operation is expected to generate, on average, approximately 20 million carats of diamonds per annum over the life of the block cave.

It would be easy to assume a seamless shift from open pit to underground mining at Argyle − after all it is the same pipe and the same diamonds. This is not the case. In order to deliver a return on the significant investment in an underground mine at Argyle, Rio Tinto Diamonds is driving a fundamental shift in how it operates its diamonds business with a sharp eye to value creation.

Jean-Marc Lieberherr, managing director of Rio Tinto Diamonds explains the transition that has been taking place over the past 12 months: “Our operating philosophy is driven by the need to be a globally-integrated diamond company, across all operating sites and from the mine to the marketplace. What this means in practice is that no operating decision is taken in isolation to the market, and no marketing decision is taken in isolation from the operations.”

Kim Truter, chief operating officer for the diamond mines in Rio Tinto’s stable has been closely involved in executing this strategy: “As a market-led organisation we are continually making purposeful trade-offs across all our diamond mine sites, using sales and production data in close to real time. Whilst it is still early days we are already seeing results in everything from working capital to how we run our shutdowns, to purposeful engagement with our customers.”

Supply chain management further downstream remains an important ingredient in driving value from Argyle’s underground mine. With its steady supply of characteristically small, coloured diamonds Rio Tinto has been instrumental in creating new markets for fashion diamond jewellery in China and India. By working with diamond jewellery manufacturers, designers and retailers the Argyle production is “pulled” through the supply chain to develop a route to market for these unique gems.

Finally the signature stone − Argyle pink diamonds, from a certifiable source and of a depth and range of colour never seen before − continues to command the attention of the world’s diamond connoisseurs, collectors and investors. This year, celebrating 30 years of its iconic Pink Diamonds Tender, this truly top end of the luxury diamond market continues to defy gravity with sustained demand and very strong prices.

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The Kutchinsky Library Egg, featuring 20,000 Argyle diamonds, was a key promotional tool for Argyle in the 1990s. The 700mm egg was unveiled before a celebrity audience at the Victoria and Albert Museum in London before successfully touring the world.

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In 2012, an extraordinary collection of pink diamond jewels were exhibited at the Out of the Vault Exhibition at Kensington Palace in London. The one-day exhibition − a celebration of Her Royal Highness Queen Elizabeth II’s Diamond Jubilee − was valued at more than US$60 million. Featured: The Argyle Pink Diamonds Tiara designed by Linneys.

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The Argyle Pink Diamonds Tiara designed by Linneys.

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The Argyle Empress Necklace designed by Chow Tai Fook.

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Diamond Jubilee Blossom Brooch designed by Mondial Neuman.

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The Majestic Pink Diamond Bracelet designed by LJ West.

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The Argyle Twins earrings, designed by La Serlas.

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“Bijoux de Parfum: The Wisteria” shoulder brooch by Kashikey.

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Peng Peng, a 20 centimetre diamond-encrusted kookaburra was designed by China’s leading jewellery company, Chow Tai Fook, in collaboration with Rio Tinto Diamonds to symbolise a new strategic partnership. Peng Peng was showcased at the Australian pavilion at the Shanghai World Expo in 2010.

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In November, 2013 Rio Tinto launched “The Fashion of Diamonds”, an initiative that aims to introduce new ideas and concepts to fuel China’s growing demand for diamond fashion jewellery. Thirteen collections designed by China’s leading jewellery designers were unveiled at the launch event. Model wearing “Fashion of Diamonds” jewellery.

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Jewellery from the “Pattern Play” collection.

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“The Fashion of Diamonds” jewellery collection.

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It didn’t take long before Argyle’s champagne diamonds were in demand on the red carpet. One of the most dazzling was the champagne diamond dress, embroidered with 3,000 carats of champagne diamonds and worn by E! reporter Maria Menounos at the 2004 Academy Awards.