Will Argyle Layoffs Choke Pink Diamond Production?

March 4th, 2013 by Noam Flint

Argyle Intense Pink Diamond

Of all the different shades that diamonds can come in, only one of these seems to have a consistent source. To the best of my knowledge, there’s no diamond mine anywhere in the world that produces blue stones on a regular basis. If you have a hankering for purplish rocks, you’ll just have to wait until the earth spits one out. Jonesing for a red gem? Get in line with all the other admirers. But if you have a thing for blush, then you’re in luck. The forces of nature have seen fit to grace one particular spot on the planet with a plethora of pink diamonds. Month after month, year after year, Australia’s Argyle mine has been churning out little beauties ranging from rose to fuchsia.

It seemed that the future was bright pink for Argyle employees, until two weeks ago. Everyone knew that Argyle’s owner, multi-national mining giant Rio Tinto, has been looking for an exit from the diamond business. The company has said so, and has been its talks to sell off its assets in northern Canada since last summer. It was assumed that another major player in the diamond industry would step in and purchase the Argyle mine, leaving operations intact. But Rio’s recent cost-cutting moves down under would seem to mean that it’s now too late for the smooth transition workers were hoping for. In the weeks to come, over 300 Argyle employees will no longer be retrieving pink diamonds; instead, they’ll be receiving pink slips.

Diamonds only make up about 2% of Rio’s global operations, but the firm is determined to cut out the deadwood and improve profitability. So they’ve announced $5 billion in cost-cutting moves, and in addition to the firings, these will include the postponement of an underground expansion project at Argyle. Now those pink diamonds aren’t going to pull themselves out of the ground! Without a second crushing machine, pink diamond production can’t possibly continue apace. But Rio doesn’t answer to diamond aficionados, it reports to its shareholders. So pink gems will still be extracted at Argyle, but not nearly at the pace that was promised. If you were planning to pick up a pink stone, you might want to do so sooner than later, before that lineup turns into a bottleneck.