Rio Tinto: mining's biggest player
Diavik's parent company is a controversial giant
by Derek Neary
NNSL (Apr 15/98) - The primary owner of Diavik Diamonds is a colossus in the mining industry.
With more than 60 mines and processing plants in some 40 countries, Rio Tinto is the world's largest private mining company, directly employing more than 51,000 people around the globe.
Its net earnings for the 1997 fiscal year were a reported $1.2 billion U.S., up 11 per cent from 1996. Its assets are in excess of $18 billion Canadian, according to xxxThe Guardian, a British daily.
Rio Tinto is a "dual listed" company formed in 1995 by the merger between The RTZ Corporation PLA and CRA Limited. It exercises control from London, England, with offices in Australia and the United Kingdom.
By its own description "Rio Tinto" is a single business entity with the same board of directors, a unified management and a combined portfolio of mineral resources." Its origins, as Rio Tinto Zinc, stretch back to 1873, when it was founded in Spain.
Among Rio Tinto's group of companies are a number of gold, aluminum, iron ore, copper, uranium and energy operations. Borax, Hamersley, Kennecott (which is currently exploring in the NWT), and Rio Tinto Iron and Titanium are among the company's subsidiaries.
With that size comes scrutiny and suspicion. Rio Tinto has been censured on a variety of fronts. It has been involved in a major conflict over pollution on the South Pacific island of Bougainville in Papua New Guinea, where the aboriginal population forced its copper mine to close in 1989.
According to xxxThe Guardian, Rio Tinto has tried to deny Australian workers the right to collective bargaining and de-unionize its mines. And in South Africa, Rio Tinto has been accused of anti-trade union policies.
But Len Nelson, a representative of the Canadian Labor Congress who used to work for Rio Tinto's uranium
mine in Elliot Lake, Ont., said dealing with Rio Tinto in Canada has not been a negative experience.
"It's not like dealing with (Royal Oak owner) Peggy Witte or something. Their labor relations are far superior."
Nelson added that while many mining companies "operate with whatever they can get away with" in the Third World, Rio Tinto operates "as a different company in Canada than they do in these other countries," said Nelson. "They work within whatever the law permits."
On its Web site, Rio Tinto professes, "Our commitment to health, safety, and the enhancement of the skill and capabilities of our employees is second to none in mining."
In 1996, Rio Tinto reports to have spent close to $23 million in community projects. The group companies have offered financial support to a number of educational facilities worldwide.
In the NWT, Rio Tinto is working to establish Diavik Diamonds through subsidiary Diavik Diamond Mines Inc. It controls 60 per cent of the venture, while Aber Resources of Vancouver, controls the other 40 per cent. The project, based in Lac de Gras, some 300 kilometres northeast of Yellowknife, is undergoing a full engineering feasibility study and will also be subject to a environmental assessment. If all is approved, it will be next fall before development begins.
The mine is expected to be operational for between 16 and 22 years. During this time, 300 to 400 people are expected to be employed with annual wages totalling approximately $25 million. Another 270 jobs would be created indirectly.