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[ferro-alloys.com]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 agreement.

“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 Calgary, Alberta.

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 declined comment on the fate of its Diavik stake. Rio has said it will not bid on the minority interest.

(Mining.com)

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