Rio Tinto's (ASX: RIO) Argyle diamond mine in Western Australia has produced a number of new records for the miner, including the sale of a 1.56 carat fancy red diamond worth $2 million at its annual tender.
The 64 red, pink and blue diamonds were bought by buyers from all around the globe. Rio's diamonds managing director Jean-Marc Lieberherr said, "We are delighted with the results for the 2013 tender collection which are a reflection of their rarity, provenance and global reach."
Demand for diamonds is expected to increase modestly in coming years thanks to a rising middle class, particularly throughout Asia. "Both established and emerging markets were well represented in the winning bids," Rio said. All 64 diamonds sold above their estimated tender prices.
Despite the demand for diamonds, Rio's plans to sell its business were scrapped after it failed to attract suitors. Rio's diamond business posted $192 million in underlying earnings for the six months to June 30, 2013, thanks to higher prices, and the company's $2.2 billion underground mine at Argyle is expected to produce up to 20 million carats per year and provide ongoing earnings until 2020.
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Motley Fool contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies.
