Harry Winston lowers Diavik diamond mine production target

On Tuesday, Harry Winston Diamond (TSX:HW, NYSE:HWD) reduced its 2012 production target for the Diavik mine to 7.4 million carats as the operation shifts its efforts to concentrate on processing higher-valued diamonds.

Harry Winston, which has a 40% stake in the Canadian mine, said the lower volume would result from a delay in processing of lower-value carats.

The Toronto-based jeweller said the mine produced 1.93 million carats in the third quarter, the same as in 2011 but with a smaller amount of ore processed due to a shift to underground mining with higher-valued carats.

Harry Winston, which is looking to become the sole owner of Diavik, added that the rough diamond market has stabilized through the third calendar quarter as demand has improved.

Last August Harry Winston Diamond said the mine has another 11 years to go and a current net value of $2.6 billion.

The company has also said that Diavik will have a total capital cost of $955 million until the end of its life.

Diavik’s majority owner is giant Rio Tinto PLC (LON:RIO), which owns 60% of the mine.

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