Oct 23 (Reuters) - Global miner Rio Tinto is seeking
court approval to sell its partner's share of diamonds from a
mine in Canada's Northwest Territories, a filing this week
showed, hoping to recover around C$120 million plus legal fees
and other costs.
Rio owns 60% of Diavik Diamond Mines Inc (DDMI) and says it
is owed C$119.5 million plus about C$2.4 million in fees by
junior partner Dominion Diamond ULC.
Dominion holds a 40% stake in the northern mine, located
about 300 kilometers (186 miles) north of the territorial
capital of Yellowknife.
Closely held Dominion sought creditor protection in April
saying it could not afford Rio's cash calls amid
coronavirus-related disruptions in the global diamond industry.
Dominion said Oct. 9 a proposed deal to sell its nearby
Ekati mine to an affiliate of its parent company The Washington
Companies for $126 million fell apart. That deal did not include
its minority Diavik stake.
DDMI said in court filings that Dominion has not repaid
cover payments and "has no intention of doing so" and that it
would be "unjust and inequitable" to not permit DDMI to recover
the amounts owing to it in accordance with its joint venture
"We remain focused on ensuring Diavik diamond mine continues
to operate safely, maintaining the mine's significant
contribution to the Northwest Territories and local communities
through payments to government, employees and suppliers," a
spokesman for Diavik said on Friday.
A court hearing on the application is set for Oct. 30 in
Diavik produced 6.7 million carats in 2019 but is scheduled
to close in 2025, with cleanup costs estimated at $365.3
million, according to court documents.
Dominion did not immediately return an email seeking comment
on next steps. Rio has said it will not bid on the minority
(Reporting by Jeff Lewis; Editing by Richard Chang)