Diamond jobs are not forever: Rio axes 350 at Argyle

Rio Tinto's $5 billion cost cutting drive delays project and sees workers let go at its Argyle diamond mine in West Australia.

Diamonds.net reports up to 350 contractors will be sacked as a result of the postponement of part of a $2.1 billion underground expansion project at Argyle, best known for its highly-prized pink diamonds.

The expansion was first approved in 2005 and initial output from the project is still on track for April, but the ditching of a second crusher puts in doubt plans to have the project at full operational capability by 2015.

Rio, the world's no two miner, said in July its diamond division was for sale as part of a company-wide restructuring and cost-cutting program, but the Argyle delay may put off prospective buyers of the gems business.

Fellow Anglo-Australian giant, BHP Billiton offloaded its diamond operations to retailer Harry Winston in November.