Rio Tinto subsidiary Argyle Diamonds provides a case study in how marketing and product development can deliver an alternative path to value adding in the mining sector.
Most of the production from Argyle was originally categorised as brown diamonds and earmarked for industrial uses.
The small, coloured diamonds at Argyle were, on average, low quality and a far cry from the clear, colourless diamonds that traditionally dominated the sector.
Argyle set about creating a new market for its diamonds, most of which are in colours now known as champagne and cognac.
Its output also includes the rare pink diamonds, which comprise less than 0.1 per cent of Argyle’s output.
Argyle’s investment in global promotions and market development helped position its diamonds as affordable fashion jewellery.
This was a big change from the traditional positioning of diamonds as once-in-a-lifetime bridal jewellery – the promotional approach favoured by South African producer De Beers, which formerly dominated the industry.
The global profile of Argyle’s diamonds, especially its pink diamonds, has been a boon for tourism marketing in Western Australia, especially the Kimberley region where the mine is located.
The number of jobs at Argyle has been miniscule compared to the tens of thousands of people employed in India cutting and polishing its diamonds.
The number of cutters in India working on Argyle diamonds is estimated to have peaked at 200,000.
But the successful repositioning of its output, along with the mine’s large reserves and high-grade ore, has helped sustain the Argyle mine since 1983, when alluvial mining commenced.
The start of open-pit mining in 1985 doubled the volume of world diamond production almost overnight.
Argyle has produced more than 825 million carats of rough diamonds.
It has been a fully underground mine since 2013, employing 400 people, and is due to be shut later this year, bringing an end to a unique chapter in WA’s mining history.
