Abstract After 12 years of struggle, but still failed to start mining work, Rio Tinto decided to "snap the tail to survive" and abandon a diamond mine in India. Rio Tinto said on Monday that it will close its Madhya Pradesh in India before the end of this year.
After 12 years of struggle, but still failed to start mining work, Rio Tinto decided to "break the tail to survive" and abandon a diamond mine in India.
Rio Tinto said on Monday that it will close the Bunder diamond mine in Madhya Pradesh, India by the end of this year. Rio said that Bunder is still the top diamond mine, and it will negotiate with the Indian government and the Madhya Pradesh government to allow new investors to take over the project.
Rio Tinto discovered the Bunder diamond mine in 2004. According to the Australian media Australian Mining, Rio Tinto has spent nearly $120 million on the diamond mine, and plans to continue investing $650 million in mining.
But in the past 12 years, Rio Tinto has been in constant conflict with local tribes, environmentalists and the Indian government in the issue of mining this mining area. It was difficult to start the mining work, which eventually led to Rio Tinto's decision to abandon the project to save money.
Rio Tinto's own performance has also been greatly affected by the continued decline in commodity prices and the sluggish international demand. Last year, Rio Tinto's profits were devastated, falling from $9.3 billion in 2014 to $4.5 billion. Earlier this year, Rio Tinto announced that it would abandon its dividend plan and said it would retain cash by further reducing costs.
However, the situation of Rio Tinto this year does not seem to have improved. Earlier this month, Rio Tinto handed over the semi-annual financial report with the least profit in 12 years. In view of the slowdown in economic growth and economic transformation in China, where the ore demand is a big country, Rio Tinto said that the market environment is still challenging in the near future, and we must remain vigilant in the second half of the year.
Wall Street has previously mentioned that as of the end of June this year, after a one-time project, the basic profit fell 47% year-on-year to US$1.56 billion, the lowest since 2004. Affected by the decline in earnings, Rio Tinto's interim dividend decreased by 58% to 0.45 cents per share.
Rio Tinto pointed out in the financial report that China's construction activities had a positive impact on the commodity market in the first half of the year, but the impact was uneven, and steel and other raw materials benefited the most. Rio Tinto believes that China's economic growth has stabilized, but it is in a long transition period of slowing growth. The main driving force for growth will no longer be commodity-intensive investment. In addition, the global economic growth model has not yet got rid of the low productivity, the second half. Still need to be vigilant.
In addition, according to Indian media India Today, Rio Tinto said it is evaluating its global projects to continue to generate revenue for investors in the context of slowing economic growth. The cessation of the continued development of the Bunder diamond mine is precisely the decision made after the assessment.

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