Rio Tinto Group announced an increase in profits from core activities by 21% in the first half, the company said in a press release. At the same time, the profit of the diamond division of the company fell by 17% year-on-year to $ 160 million.
Income indicators for the first half of 2014 take into account tax payments of Rio Tinto Diamonds in the amount of $ 25 million relating to previous years.
In absolute terms, the company's operating expenses for the reporting period were $ 188 million lower compared to the first half of 2013, including $ 100 million won on the exchange difference. Cash inflow from operating activities of $ 424 million was 27% higher than in the same period last year, reflecting higher EBITDA (earnings before taxes, interest, depreciation and amortization) and efficient management of working capital.
For the first half of 2014, prices for rough diamonds rose by 8%. In the medium and long term, there is a significant increase in demand for diamonds, especially in India and China, due to the growth in disposable income and spending on luxury goods.
The production of raw diamonds in the first half of the year increased by 2% compared to the same period last year. It is reported that high production figures at the Diavik mine made it possible to compensate for a significant decline in production volumes in the Argyle project, caused by the transition to underground mining and processing of tailings of low-grade rock during the first quarter, when the capacity of underground mining increased .