|
Report Date : |
09.10.2013 |
|
|
|
|
Tel. No.: |
00116189470994 |
|
Fax No.: |
001561894770900 |
IDENTIFICATION DETAILS
|
Name : |
ARGYLE DIAMONDS LIMITED |
|
|
|
|
Formerly Known as: |
CAPRICORN DIAMONDS LIMITED |
|
|
|
|
Registered Office : |
The Quadrant, Level 8, 1 William Street, Perth, Western Australia, Zip/postal code 6000 |
|
|
|
|
Country : |
Australia |
|
|
|
|
Financials (as on) : |
31.12.2012 (Non Consolidated 31.12.2012 (Group Consolidated) |
|
|
|
|
Date of Incorporation : |
11.07.1984 |
|
|
|
|
Com. Reg. No.: |
009102621 |
|
|
|
|
Legal Form : |
Unlisted Australian Public Company |
|
|
|
|
Line of Business : |
exploration, mining and processing of diamonds |
|
|
|
|
No. of Employees : |
71,219 (Rio Tinto Group) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ca |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
Status : |
Moderate |
|
|
|
|
Payment Behaviour : |
Slow |
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|
|
Litigation : |
---- |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
Australia |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
austraLia ECONOMIC OVERVIEW
The Australian
economy has experienced continuous growth and features low unemployment,
contained inflation, very low public debt, and a strong and stable financial
system. By 2012, Australia had experienced more than 20 years of continued
economic growth, averaging 3.5% a year. Demand for resources and energy from
Asia and especially China has grown rapidly, creating a channel for resources
investments and growth in commodity exports. The high Australian dollar has
hurt the manufacturing sector, while the services sector is the largest part of
the Australian economy, accounting for about 70% of GDP and 75% of jobs.
Australia was comparatively unaffected by the global financial crisis as the
banking system has remained strong and inflation is under control. Australia
has benefited from a dramatic surge in its terms of trade in recent years,
stemming from rising global commodity prices. Australia is a significant
exporter of natural resources, energy, and food. Australia's abundant and
diverse natural resources attract high levels of foreign investment and include
extensive reserves of coal, iron, copper, gold, natural gas, uranium, and
renewable energy sources. A series of major investments, such as the US$40
billion Gorgon Liquid Natural Gas project, will significantly expand the resources
sector. Australia is an open market with minimal restrictions on imports of
goods and services. The process of opening up has increased productivity,
stimulated growth, and made the economy more flexible and dynamic. Australia
plays an active role in the World Trade Organization, APEC, the G20, and other
trade forums. Australia has bilateral free trade agreements (FTAs) with Chile,
Malaysia, New Zealand, Singapore, Thailand, and the US, has a regional FTA with
ASEAN and New Zealand, is negotiating agreements with China, India, Indonesia,
Japan, and the Republic of Korea, as well as with its Pacific neighbors and the
Gulf Cooperation Council countries, and is also working on the Trans-Pacific
Partnership Agreement with Brunei Darussalam, Canada, Chile, Malaysia, Mexico,
New Zealand, Peru, Singapore, the US, and Vietnam.
|
Source : CIA |
Verified Address
Subject name : ARGYLE DIAMONDS LIMITED
Business address : The Quadrant
Level 8, 1
William Street
Town : Perth
Province : Western Australia
Zip/postal code : 6000
Country : Australia
Tel : +61 8 94821166
Fax : +61 8 94821161
Website : www.argylediamonds.com.au
Registered address : The Quadrant
Level 8, 1 William Street
Town : Perth
Province : Western Australia
Zip/postal code : 6000
Country : Australia
Executive Summary
Date founded or registered : 11/07/1984
Legal form : Unlisted
Australian Public Company
Chief executive : Kim Robin Truter
Issued & paid up capital
: AUD 1,602,000,000
Sales turnover : AUD 206,354,000 (Non-consolidated
12 months, 31/12/2012)
Net income : AUD -518,636,000
(Non-consolidated 12 months, 31/12/2012)
Total fixed assets : AUD 741,458,000 (Non-consolidated
12 months, 31/12/2012)
Line of business : Exploration, mining and
processing of diamonds.
Staff employed : 71,219 (Rio Tinto Group)
Company Analysis
Country risk : Country risk is
minimal
Operation trend : Operational trend is
declining
Management experience : Management is adequately experienced
Financial performance : Financial performance is poor
Organisation structure : Organisational structure is stable
Detrimental : No detrimental records found
Payment history : No payment delays noted
Comments : It is strictly
advisable to conduct business dealing on prepayment or L/C basis
due to the Subject's share equity deficit.
Registry Data
Registration date : 11/07/1984
Legal form : Unlisted
Australian Public Company
Registration no Australian Company
Number: 009102621
Registered authority : Australian Securities and
Investments Commission
Fiscal/ Tax no : Australian Business
Number: 36009102621
Registry status : Live/Active
Previous name : CAPRICORN DIAMONDS
LIMITED
CAPRICORN
DIAMONDS PTY. LIMITED
CRA
DIAMONDS PTY. LIMITED
ARGYLE
CANTEEN SERVICES PTY. LIMITED
PEGARAH
PTY. LTD. (initial)
Change of legal form : None reported.
Key Management
Name : Kim Robin
Truter
Designation : Managing Director
Appointments
Name : Shane
Nicholas Johnson
Designation : Director
Appointment date : 13/04/11
Address : 14 Plum Court
Kununurra,
WA 6743
Australia
Biography : Born on
24-06-1973 in Hobart, Tasmania, Australia.
Name : Giles
Hamilton Lenz
Designation : Director
Appointment date : 15/09/10
Address : 250 Aldersyde
Road
Bickley,
WA 6076
Australia
Biography : Born on
05-06-1968 in Sydney, New South Wales, Australia.
Name : Kim Robin
Truter
Designation : Director
Appointment date : 06/08/12
Address : 6 Carron Road
Applecross,
WA 6153
Australia
Biography : Born on
28/04/1965 in Mbabane, South Africa.
Name : Roberto
Maltese
Designation : Company Secretary
Appointment date : 28/06/13
Address : 9 Willandra
Place
Hillarys,
WA 6025
Australia
Biography : Born on
09/03/1974 in Perth, Western Australia, Australia.
Staff employed : 71,219 (Rio Tinto Group)
Key Advisors
Auditors : PRICE
WATERHOUSE COOPERS
Unit QV1,
250 St Georges Terrace
Perth, WA
6000
Australia
Composition
Authorized Capital : AUD 1,602,000,000
No of shares : 2 Class A Shares /
1,601,999,998 Class B Shares
Share par value : AUD
1
Issued capital : AUD 1,602,000,000
Paid up capital : AUD 1,602,000,000
How listed : Full List
Composition
Shareholder name : RIO TINTO LIMITED
Address : Level 33 , 120
Collins Street
Melbourne,
VIC 3000
Australia
No. of shares : 2 Class A Shares /
1,601,999,998 Class B Shares
% of shares : 100%
Comments : About Rio Tinto
Diamonds
Rio Tinto
is one of the world’s major diamond producers through its 100 per cent
control of
the Argyle mine in Australia, 60 percent of the Diavik mine in Canada, 78 per cent interest in the Murowa mine in
Zimbabwe. These three mines allow
Rio Tinto to produce diamonds for all market segments. Rio Tinto also has an advanced diamond project in India. Rio Tinto’s share of the production from its three operating mines is sold through its Diamonds Sales and Marketing headquarters office in Antwerp, Belgium with representative offices in Mumbai, Hong Kong and New York. Rio Tinto Diamonds is a leading supporter of the Kimberley Process as well as a founding member of Responsible Jewellery Council.
Structure
Name : Jointly held by RIO
TINTO LIMITED / RIO TINTO PLC
Affiliation type : Parent Company
Address : Level 33 120 Collins Street
Melbourne,
VIC 3000
Australia
2
Eastbourne Terrace
London W2
6LG
United
Kingdom
Comments : RIO TINTO LIMITED / RIO TINTO
PLC engages in finding, mining, and
processing
mineral resources worldwide. The company is involved in the mining
and
production of aluminum products, including bauxite, alumina, and aluminum;
copper,
gold, silver, and molybdenum; diamonds, borates, salt, and titanium
dioxide
feedstocks, as well as purity iron, metal powders, zircon, and rutile;
thermal
and coking coal, and uranium; and iron ore. It primarily operates in China,
Japan,
other countries in Asia, the United States, the United Kingdom, Europe,
Canada,
and Australia. Rio Tinto Limited was founded in 1873.
Name : COAL & ALLIED
INDUSTRIES LIMITED
Affiliation type : Sister Company
Address : 123 Albert Street
Brisbane,
4000 Australia
Australia
Comments : Primary Activity: Iron ore
mining
Name : HAMERSLEY IRON PTY
LIMITED
Affiliation type : Sister Company
Address : 152-158 St Georges Terrace
Perth, WA
6000
Australia
Comments : Primary Activity: Iron ore
mining
Name : IRON ORE COMPANY OF
CANADA INC.
Affiliation type : Sister Company
Address : 1000 Sherbrooke Street
West, Suite 1920
Montreal,
QC H3A 3G4
Canada
Comments : Primary Activity: Iron ore mining
Name : RIO TINTO ALCAN INC.
Affiliation type : Sister Company
Address : Canada
Comments : Primary Activity: Bauxite
mining; alumina refining; production of specialty alumina;
aluminium smelting; engineered products.
Name : RIO TINTO ALUMINIUM
(HOLDINGS) LIMITED
Affiliation type : Sister Company
Address : Australia
Comments : Primary Activity: Bauxite
mining; alumina production; primary aluminium smelting.
Related
companies and corporate affiliations comments
Other companies of the Rio Tinto Group
should be considered affiliates of the Subject.
Bank Details
Name of bank : National Australia Bank
Limited
Address : Australia
Account details : Current Account
Comments : It is generally not
the policy of local banks to provide credit status information to
non
related parties, however interested parties would be advised to consult first
with the
Subject if banker's references are required.
Mortgages : None reported.
Legal Fillings
Bankruptcy fillings : None reported.
Court judgements : None reported.
Tax liens : None reported.
Others : None
reported.
Description
Source of financial statement
: Commercial Registry Filings
Financial statement date : 31/12/12
Type of accounts : Full audited
Currency : Australia Dollar
(AUD)
Exchange rate : 1 USD = AUD 1.06 as of
06-10-2013
Summarized
Financial Information
Consolidation type : Non Consolidated Non Consolidated Group
Consolidated
Currency : Australia Dollar (AUD) Australia Dollar (AUD) US Dollar (USD)
Denomination : (x1) One (x1) One (x1)
One
Date of financial year end
31/12/12 31/12/11 31/12/12
Length of accounts : 12 months 12
months 12 months
Sale turnover / Income : 206,354,000 140,131,000
50,967,000,000
Profit before tax : -739,083,000 -773,284,000 -2,568,000,000
Net income : -518,636,000 -545,923,000 -2,997,000,000
Non current assets : 563,768,000 487,516,000 97,380,000,000
Current assets : 177,690,000 186,209,000 20,193,000,000
Inventories : 55,926,000 54,964,000 423,000,000
Total assets : 741,458,000 673,725,000 117,573,000,000
Current liabilities : 957,338,000 1,190,982,000 13,821,000,000
Non current liabilities 275,084,000 254,888,000 45,731,000,000
Total liabilities : 1,232,422,000 1,445,870,000 59,552,000,000
Share equity : -490,964,000 -772,145,000 58,021,000,000
Retained earning : -2,092,964,000 -1,582,215,000 21,827,000,000
Comments :
The non consolidated
financial information above relates to the Subject only.
The group’s consolidated
financial information above relates to the Subject’s jointly Ultimate Holding
Company TINTO LIMITED / RIO TINTO PLC and all its subsidiaries which include
the Subject.
Main activities : The Subject engages in exploration,
mining and processing of diamonds
from
Argyle Mine located in the East Kimberley region in the remote north
of Western
Australia. Argyle Mine has been operating since 1983 and is
known to
be the fourth largest diamond producing mine in the world by
volume.
The
diamonds produced by the Argyle mines are found in a range of
colours
including blue, champagne and pink. Argyle mines is the world's
primary
source of rare pink diamonds, which have become the Subject
signature
stone.
The
diamonds recovered at the mine are sent to Rio Tinto Diamonds’
sales and
marketing office in Antwerp Belgium, where they are sorted and
prepared
for sale. The majority of the diamonds from the Argyle mine are
sold as
rough diamonds, primarily to an Indian customer base comprising
diamond
traders and manufacturers.
Rare pink
diamonds from the Argyle mine are all cut and polished and sold
as loose
polished diamonds to an international customer base. The Argyle
Pink
Diamonds business has its headquarters in Perth, Western Australia,
also the
location of its state-of-the art cutting factory. The Perth factory cuts
and
polishes the finest pink diamonds from the Argyle Mine that are then
sold via
an exclusive tender.
The
Subject is ultimately owned by Rio Tinto Limited. Rio Tinto Limited is
one of the
world's largest mining company.
Rio Tinto
Limited engages in finding, mining, and processing mineral
resources
worldwide. The company is involved in the mining and
production
of aluminum products, including bauxite, alumina, and
aluminum;
copper, gold, silver, and molybdenum; diamonds, borates, salt,
and
titanium dioxide feedstocks, as well as purity iron, metal powders,
zircon,
and rutile; thermal and coking coal, and uranium; and iron ore. It
primarily
operates in China, Japan, other countries in Asia, the United
States,
the United Kingdom, Europe, Canada, and Australia. Rio Tinto
Limited
was founded in 1873.
Product & services :
· Rough Diamonds
· Pink Diamonds
Purchases
International : Asia, Europe
Sales
International : Belgium
Key events : September 10, 2013
Rio Tinto Bets On China For The Future Of Its Diamonds Business
Rio Tinto ( RIO ) seems to be betting heavily on the Chinese
market for its
diamonds
business. This week in Hong Kong, the company is hosting an
exclusive
viewing of its pink diamonds extracted from the Argyle mine. The
viewing is
by invitation only and around 100 guests have been selected for
the same,
including jewelry makers, connoisseurs, collectors and investors.
The
viewing is a part of the Argyle Pink Diamond Tender event which
comprises
the best of a year's production of pink diamonds from the Argyle
mine in
Western Australia.
While Rio
had earlier been looking for a buyer for its diamonds business for
more than a
year, in the absence of the right suitor it decided to scrap the
plan in
June. The effort to tap the Chinese market seems to be a part of the
larger
strategy to tap the North American and Asian markets over the
medium and
long term even though these markets are sluggish right now.
Rio
articulated its decision to focus on these two regions and considers the
Chinese
desire for diamonds and its emerging middle class as keys to
success in
this market.
The Opportunity In China
According to the CEO of Rio's
diamonds and minerals division, China
represents about 5% of its
market right now. However, he thinks that a
burgeoning and aspiring
middle class may well result in China accounting
for about 20% of the market
through 2020. The opportunity is substantial
because the Chinese buy not
just diamond-studded engagements rings but
also diamond fashion jewelry
for themselves. In order to tap this
opportunity, Rio has already
partnered with the Chow Tai Fook Jewelry
Group which makes Rio's
jewelry and gems available across its 1,000
stores in the greater China
region.
The validation for Rio's
estimates about the potential of the Chinese market
is provided by the
double-digit year-over-year growth it has witnessed for
its flagship Australian
Colors diamond collection which was launched at the
World Expo in Shanghai in
2010.
China is also a perfect fit
for Rio's production from its Argyle diamond
mines. The region is
typically known for the small volumes of the rare pink
diamonds it produces.
However, pink diamonds comprise just 0.01% of
Argyle's total production. It
produces large volumes of affordable
commercial diamonds which are
ideal for use in fashion accessories of the
kind the emerging Chinese
middle class is demanding. In April this year,
Rio opened a new Argyle
underground mine which will boost the average
annual production from the
region to around 20 million carats and also
extend the mining potential
of the region to 2020.
The viewing event in Hong
Kong will have on display 64 diamonds with a
combined weight of 54.99
carats. Of these, 58 are pink diamonds while
there are three blue and
three red diamonds of an extremely rare variety.
Pink diamonds, owing to their
rarity, sell for more than $1 million per carat.
The Future Of Rio's Diamond
Business The natural resources sector is sluggish at the moment due to slower economic
growth in key emerging markets. The diamond business
generated a loss of $43
million for Rio in 2012 compared to a net profit of
$10 million in 2011. This was
due to lower prices, which in turn was a
function of lower demand from
key Asian and North American markets.
We think that the push to
develop robust diamond markets in Asia,
especially China, could be a
part of Rio's strategy to eventually make a
compelling case for
acquisition by specialized players in the business.
While the diamonds business
is intrinsically a good one, it makes little
sense for a company of Rio's
scale and nature. It is too small to be of
strategic significance to the
company and provides little by way of
diversification to its
bread-and-butter iron-ore business. Also, good quality
diamond mines are very
difficult to come by these days and their
development involves a long
gestation period. The limit to scalability was
one of the reasons Rio was
looking to sell off the business in the first place.
It eats into management's
time and company resources would be better
channeled elsewhere in light
of the tough times Rio is facing right now.
Source: www.nasdaq.com
24 June, 2013
Rio Tinto opts to retain
diamonds businesses
Rio Tinto has decided to
retain its diamonds businesses after concluding a
strategic review which
considered a range of options, including potential
divestment.
Rio Tinto Diamonds &
Minerals chief executive Alan Davies said "The
medium to long-term market
fundamentals for diamonds remain robust,
fuelled by growing demand for
luxury goods in Asia and continuing strong
demand in North America.
"We have valuable,
high-quality diamonds businesses that are well
positioned to capitalise on
the positive market outlook.
"After considering a
number of alternative strategic ownership options it is
clear the best path to
generate maximum value for our shareholders is to
retain these
businesses."
About Rio Tinto Diamonds
Rio Tinto operates a fully
integrated diamonds business from exploration
through to sales and
marketing. It is one of the world's major diamond
producers through its 100 per
cent ownership of the Argyle mine in
Australia, 60 per cent of the
Diavik mine in Canada and a 78 per cent
interest in the Murowa mine
in Zimbabwe. These three mines allow Rio
Tinto to produce the full
range of diamonds for all market segments. Rio
Tinto also has an advanced
diamond project, Bunder, in India.
Rio Tinto's share of the production
from its three operating diamond mines
is sold through its sales and
marketing headquarters in Antwerp, with
representative offices in
Mumbai, Hong Kong and New York. It also
operates a niche cutting and
polishing factory in Perth for the rare pink
diamonds from its Argyle
mine. Rio Tinto is a leading supporter of the
Kimberley Process as well as
a founding member of Responsible Jewellery
Council.
About Rio Tinto
Rio Tinto is a leading
international mining group headquartered in the UK,
combining Rio Tinto plc, a
London and New York Stock Exchange listed
company, and Rio Tinto
Limited, which is listed on the Australian Securities
Exchange.
Rio Tinto's business is
finding, mining, and processing mineral resources.
Major products are aluminium,
copper, diamonds, thermal and
metallurgical coal, uranium,
gold, industrial minerals (borax, titanium
dioxide and salt) and iron
ore. Activities span the world and are strongly
represented in Australia and
North America with significant businesses in
Asia, Europe, Africa and
South America.
Source: www.riotinto.com
24 June, 2013
Rio Tinto Drops Sale of
Diamond Business
MELBOURNE—Rio Tinto RIO.LN
-2.34% PLC abandoned plans to sell or
seek a listing of its diamond
portfolio after failing to attract potential new
investors for a business some
analysts estimated could be worth more than
$2 billion.
Major miners like Rio Tinto
RIO.AU -0.16% face a challenge as they look to
bolster their balance sheets
by offloading smaller assets: The prices of
many commodities are in the
doldrums. Gemstone prices have been held
back by sluggish demand for
luxury goods in developed markets, although
producers hope for stronger
sales as disposable incomes rise in populous
nations like China and India.
In the diamond market,
controlled by only a handful of major
producers—notably Anglo
American AAL.LN -1.88% PLC's De Beers unit
and Russia's Alrosa Co.—asset
sales can be especially hard. An offer from
one of the large companies
will face close scrutiny from regulators, while
smaller rivals often can't
afford the price.
Rio Tinto produces about 12%
of the world's diamonds, from mines
including Argyle in Western
Australia—the largest source of rare pink
diamonds—and Diavik in
Canada's Northwest Territories, in which it has a
majority stake. The company
put the book value of the diamonds portfolio
at US$1.3 billion, but some
analysts estimated it could be worth more than
US$2 billion.
Alan Davies, chief executive
of Rio Tinto's diamonds and minerals division,
said Monday the company
decided to keep the business after a yearlong
review concluded this was the
best way to generate value for shareholders.
The decision signals Rio
Tinto Chief Executive Sam Walsh isn't running a
fire sale, despite promising
significant cash proceeds from disposals this
year as the Anglo-Australian
mining company—seeking to protect a coveted
single-A credit rating—works
to cut costs and reduce its US$19 billion in
debt. The company, which has
billions of dollars of smaller or weaker
assets on the block, had been
working toward either selling the diamond
assets or listing them
separately.
Other miners have also looked
to scale back or eliminate their diamond
exposure. In April, BHP
Billiton Ltd. BHP.AU +0.03% finalized the sale of its
Ekati mine in northern Canada
for US$553 million to Dominion Diamond
Corp., DDC.T -0.93% formerly
Harry Winston Diamond Mines, ending its
involvement in the diamond
interest. Dominion's other producing asset is a
40% stake in the Diavik mine.
Hit by lower prices and
depreciation charges, Rio Tinto's diamond
operations lost US$43 million
last year while producing 13.1 million carats
for the company—compared with
De Beers's 27.9 million carats and
Alrosa's 34.4 million carats.
"The medium-to-long-term
market fundamentals for diamonds remain
robust, fueled by growing
demand for luxury goods in Asia and continuing
strong demand in North
America," Mr. Davies said in a statement.
The U.S. remains the biggest
market for diamonds, although emerging
markets led by China and
India are expected to continue growing rapidly as
their economies develop.
Management consulting firm
Bain & Co. has forecast world diamond
demand will grow at an
average 5.9% a year to almost US$26 billion in
2020. Supplies of rough
diamonds will grow by about 2.7% a year to almost
157 million carats, it
predicts. That would be some 12% below the peak
177 million carats produced
by the industry in 2005, before the global
financial crisis. It
estimated the market for diamonds grew by 32% a year in
China and 22% in India
between 2005 and 2011, outpacing any other
region.
Rio Tinto, which has sold
more than US$5 billion in assets since 2009, has
accelerated efforts to exit
smaller operations and slash costs since Mr.
Walsh took over from Tom
Albanese as chief executive in January. The
company earlier this month
agreed to sell a nickel and copper mining
project in the U.S. for
roughly US$325 million in cash. It is still seeking
buyers for billions of
dollars in assets including aluminum businesses,
iron-ore operations in Canada
and coal-mine stakes in Australia.
Source: www.online.wsj.com
20 June 2012
Rio names new chief for
Argyle mine
Rio Tinto has appointed a new
managing director for Australia's premier
diamond mine, adding further
intrigue to the company's review of its
diamond operations.
Canadian-based executive Kim
Truter was this afternoon announced as
the new managing director of
the Argyle diamond mine in Western
Australia's Kimberley region,
despite that mine being one of three under
consideration for divestment.
Rio announced in late March that it was
reviewing the future of its
diamond business - and while it may retain the
assets - most analysts expect
divestments.
Mr Truter has been working as
the chief operating officer at the Diavik
diamond mine in Canada –
which Rio runs in a joint venture with Canadian
diamond company Harry
Winston.
Rio is understood to want to
run the assets in a business-as-usual mode
while the review is taking
place, and Mr Truter's experience in underground
mining is considered to be
ideal for Argyle as it transitions from an open pit
into and underground mine.
Harry Winston is considered
to be a prime suitor for the diamond assets
that both Rio and BHP Billiton
have put into the shop window over the past
seven months.
Harry Winston chief executive
Robert Gannicott recently indicated he did
not expect a resolution for
either Rio or BHP's diamond reviews until the
end of 2012.
Source:
Reuters
14 September 2010
Rio invests $803m in Argyle
underground diamond mine
Global diversified giant Rio
Tinto will invest $803-million to complete the
underground development of
its Argyle diamond mine, in Western
Australia, it announced on
Tuesday. The underground operation would
extend the life of Argyle,
which is an openpit mine, until at least 2019.
Construction activity at the
underground project, which was slowed in 2009
during the global economic
downturn, would ramp up during the first half of
next year, with targeted
production rates of nine-million tons a year
forecasted within two years.
“This investment in the
Argyle underground underlines our commitment to,
and confidence in the world
diamond industry,” said Rio Tinto diamonds
and minerals CEO Harry
Kenyon-Slaney on Tuesday. Kenyon-Slaney said
that the diamond market
continued to recover after the global financial
crisis and that long-term
industry fundamentals remained healthy.
“A significant supply gap is
expected to emerge in the medium to long term
and the outlook for demand is
strong, driven by the growth of emerging
markets. Argyle is well
positioned to capture the new demand,” he added.
The $803-million funding will
cover project development and construction of
extraction services,
crushers, a conveyor and pump stations at the mine in
the Kimberley region of
Western Australia.
Kenyon-Slaney said that the
extended mine life from the underground
project would also generate
enduring benefits for this region, building on
Argyle’s significant
contribution to economic development of the past
quarter of a century.
The Argyle mine is the
world’s largest producer of pink diamonds,
producing more than 90% of
global supplies. It also produces a significant
amount of champagne and
cognac diamonds, as well as white diamonds.
CEO Tom Albanese has said
earlier this year that growth was the group’s
“first priority” for its cash
flow and that it remains keen to invest in
Australia.
The miner expects capital
expenditure to approach $6-billion this year,
growing to $9-billion in
2011.
Source: www.miningweekly.com
History : An Australian
company, Ashton Mining Ltd, started exploring for diamonds
in the Kimberley in 1972,
under the Kalumburu Joint Venture (the name
Kalumburu was adopted from a
nearby settlement). The project
commenced following a
proposal from a geologist with diamond exploration
experience in Africa, to
explore the Kimberley region for diamonds. The
geologist was employed to
devise an exploration program that was based
on geology studies at the
University of Western Australia. These studies
suggested there were
similarities between a rock known to exist in northern
Western Australia (and later
known as lamproite) and kimberlite, the
diamond-bearing rock found in
other parts of the world. The exploration
program began in 1972 and
over the next few years small diamond and
alluvial deposits were
discovered.
In 1976 CRA Ltd (later to
become Rio Tinto Ltd) took over management of
the group, which became known
as the Ashton Joint Venture. CRA
introduced a number of
specific exploration objectives, including finding a
diamond that was larger than
a quarter of a carat, then to find a
diamond-bearing pipe and
finally a diamond-bearing pipe with a diamond
grade high enough to justify
a mine. The basic search method used was to
collect sediment samples from
the bottom of the Kimberley waterway beds.
The theory was that, as the
area is well watered in the wet season, if it did
contain any exposed pipes,
they might be crossed by creeks or rivers. As a
result diamonds and indicator
minerals would have been washed
downstream as the tops of the
pipes were eroded. Helicopters were used
extensively due to the remote
nature of the Kimberley and lack of roads
and infrastructure.
In 1977 testing of the
diamond-bearing Big Spring No.1 pipe and others
nearby found small diamonds.
Big Spring contributed to the explorers'
knowledge of the geology of
Australian diamonds, particularly with regard
to the presence of diamonds
in lamproite.
Between 1977 and 1980
significant effort went into assessing a series of
pipes in the Ellendale area.
A central treatment plant was constructed, and
12,000 diamonds were
recovered from 230,000 tonnes of lamproite.
However, it was decided that
the grade of the Ellendale deposits was not
high enough to warrant the
establishment of a mine.
In August 1979, diamonds were
found in a sample collected from Smoke
Creek, in the Ragged Ranges.
Smoke Creek runs 35kms from the Matsu
Range to Lake Argyle.
Exploration crews began to work their way along the
creek, finding an increasing
number of stones as they progressed.
By October 1979 they had
discovered the main Argyle mine pipe known as
the AK1 pipe, after one of
the geologists first spotted a small diamond
embedded in an anthill.
Following the October 1979 find, it took three years
to assess the deposit.
In 1983 a decision was taken
to establish a mine. The Argyle Diamond
Mines Joint Venture and the
Ashton Exploration Joint Venture were formed
to replace the Ashton Joint
Venture.
Alluvial mining commenced at
Smoke Creek in 1983, and the construction
of the nearby Argyle mine
began in 1984. Argyle Diamonds was named
after Lake Argyle, which lies
to the north of the site. The $450 million
construction of the AK1
process plant and associated infrastructure took
just 18 months, and the fact
that it was completed on schedule and on
budget was a tribute to the
skills and engineering feats of the workforce.
The Argyle Diamond Mine was
commissioned in December 1985.
Property & Assets
Premises : The Subject operates from
premises located at the verified heading
address consisting of an administrative office.
Branches : In addition, the Subject
operates from a diamond mine and cutting factory located at:
Argyle
House
PO Box 508
Kununurra,
WA 6743
Australia
Telephone:
+61 8 91684900
Gross Domestic
Products (GDP) & Economic Overview
Central bank : Reserve
Bank of Australia
Reserve of foreign exchange
& gold : US$ 46.714 billion
Gross domestic product - GDP
: US$ 1.586 trillion
GPP (Purchasing power parity)
: 954.296 billion of
International dollars
GDP per capita - current
prices : US$ 68,916
GDP - composition by sector : agriculture:
4%
industry:
25.6%
services:
70.4%
Inflation : 2010:
2.8%
2011: 3.4%
2012: 2.7%
Unemployment rate : 2010: 5.2%
2011: 5.1%
2012: 5.2%
Public debt
(General Government gross
debt as
a % GDP) 2010:
20.4%
2011:
22.9%
2012: 24%
Government bond ratings : Standard & Poor's: AAA
Moody's
rating: Aaa
Moody's
outlook: STA
Market value of publicly
traded shares : US$1.198 trillion
Largest companies in the
country : Qantas Airways
(Airline),Coca-Cola Amatil (Beverages), CSL (Biotechs),
Brambles (Business & Personal
Services),Crown Ltd (Casinos &
aming), Amcor (Containers & Packaging),Suncorp-Metway (Diversified
Insurance), BHP Billiton (Diversified Metals & Mining),Newcrest Mining
(Diversified Metals & Mining), Orica (Diversified Metals & Mining),
Iluka Resources (Diversified Metals & Mining), Origin Energy (Electric
Utilities), AGL Energy (Electric Utilities), Wesfarmers (Food Retail),
Woolworths (Food Retail), Metcash (Food Retail), Macquarie Group (Investment
services), AMP (Investment services), Challenger Ltd (Investment services),
Fortescue Metals Group (Iron & Steel), Bluescope Steel (Iron & Steel),
Commonwealth Bank (Major Banks), Westpac Banking Group (Major Banks), National
Australia Bank (Major Banks), ANZ (Major Banks), Woodside Petroleum (Oil &
Gas Operations), Santos (Oil & Gas Operations), Caltex Australia (Oil &
Gas Operations), WorleyParsons (Oil Services & Equipment), Toll Holdings
(Other Transportation), Transurban Group (Other Transportation), QBE Insurance
Group (Property & Casualty Insurance), Insurance Australia Group (Property
& Casualty Insurance), QR National (Railroads), Westfield Group (Real
Estate), Stockland Australia (Real Estate), Westfield Retail Trust (Real
Estate), Lend Lease (Real Estate), CFS Retail Property Trust (Real Estate),
Goodman Group (Real Estate), Bendigo & Adelaide Bank (Regional Banks), Bank
of Queensland (Regional Banks), Incitec Pivot (Specialized Chemicals), Telstra
(Telecommunications Services)
Trade &
Competitiveness Overview
Total exports : US$263.9 billion
Exports commodities : Coal, iron ore, gold, meat, wool,
alumina, wheat, machinery and transport
equipment
Total imports : US$239.7 billion
Imports commodities : Machinery and transport
equipment, computers and office machines,
telecommunication equipment and parts; crude oil and petroleum
products
Export - major partners : China 27.4%, Japan 19.2%, South
Korea 8.9%, India 5.8%
Import - major partners : China 18.5%, US 11.4%, Japan 7.9%,
Singapore 6.3%, Germany 4.7%
FDI Inflows : 2009: US$26,554
million
2010:
US$35,556 million
2011:
US$41,317 million
FDI Outflows : 2009: US$16,693
million
2010:
US$12,791 million
2011:
US$19,999 million
Best countries for doing
business : 10 out of 185 countries
Global competitiveness
ranking : 20 (ranking by country on a basis of 144, the first is the best)
Country and
Population Overview
Total population : 22.68 million
Total area : 7,692,024 km2
Capital : Canberra
Currency : Australian
dollars (AUD)
Internet users as % of total
Population 79%
PAY
Purchase Term
International : Prepayment, Telegraphic
transfer, D/P, Credit 30-120 days
Sales Term
International : Telegraphic transfer,
Prepayment, D/P, Credit 30-120 days
Trade Reference/
Payment Behaviour
Comments : As local and international
trade references were not supplied, the Subject's
payment
track record history cannot be appropriately determined but based
on our
research, payments are believed to be met without delay.
Investigation Note
Sources : Interviews and material
provided by the Subject
Other official and local business sources
DIAMOND INDUSTRY – INDIA
-
From time immemorial, India is well known in the world as the birthplace
for diamonds. It is difficult to trace the origin of diamonds but history
says that in the remote past, diamonds were mined only in India. Diamond
production in India can be traced back to almost 8th Century B.C.
India, in fact, remained undisputed leader till 18th Century
when Brazilian fields were discovered in 1725 followed by emergence of S.
Africa, Russia and Australia.
-
The achievement of the Indian diamond industry was possible only due to
combination of the manufacturing skills of the Indian workforce and the
untiring and unflagging efforts of the Indian diamantaires, supported by
progressive Government policies.
-
The area of study of family owned diamond businesses derives its
importance from the huge conglomerate of family run organizations which operate
in the diamond industry since many generations.
-
Some of the basic traits of family run business enterprises include spirit
of entrepreneurship, mutual trust lowers transaction costs, small, nimble and
quick to react, information as a source of advantage and philanthropy.
-
Family owned diamond businesses need to improve on many fronts including
higher standard of corporate governance, long-term performance – focused
strategies, modern management and technology.
-
Utmost caution is to be exercised while dealing with some medium and
large diamond traders which are usually engaged in fictitious import – export,
inter-company transactions, financially assisted by banks. In the process,
several public sector banks lost several hundred million rupees. They mostly
diverted borrowed money for diamond business into real estate and capital
markets.
-
Excerpts from Times of India dated 30th October 2010 is as
under –
-
Gem & Jewellery Export Promotion Council in its statistical data has
shown the export of polished diamonds to have increase by 28 % in February
2013. Compared to $ 1.4 bn worth of polished diamond export in February, 2012,
India exported $ 1.84 billion worth of polished diamonds in February 2013. A
senior executive of GJEPC said, “Export of cut and polished diamonds started
falling month-wise after the imposition of 2 % of import duty on the polished
diamonds. But February, 2013 has given a new ray of hope to the industry as the
export of polished diamonds has actually increased by 28 %. It means the
industry is on the track of recovery and round tripping of diamonds has
stopped completely.” Demand has started coming from the US, the UK, Japan and
China. India’s polished diamond export is expected to cross $ 21 bn in 2013-14.
-
The banking sector has started exercising restraint while following
prudent risk management norms when lending money to gems and jewellery sector.
This follows the implementation of Basel III accord – a global voluntary
regulatory standard on bank capital adequacy, stress testing and market
liquidity.
NT HISTORY
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.69 |
|
UK Pound |
1 |
Rs.99.20 |
|
Euro |
1 |
Rs.83.69 |
INFORMATION DETAILS
|
Report Prepared
by : |
SDA |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors
are apparent. Repayment of interest and principal sums in default or expected
to be in default upon maturity |
Limited with full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
---- |
NB |
New Business |
---- |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend (10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.