The Argyle Mine in Australia will not shut down, which is good news for the Indian diamond industry and companies that sell small diamonds.

Rio Tinto announced plans to develop a $760 million underground project at Argyle, enabling it to stay open through 2018. The company had weighed closing the mine for good, which would have been devastating to the world’s supply of “near gem” stones. Argyle is also a major producer of browns and pinks.

“This is obviously good news for companies which have built their skills and their business around the processing of small diamonds,” Jean-Marc Lieberherr, general manager of marketing for Rio Tinto Diamonds N.V., told JCK. “In particular, it will guarantee to companies processing Argyle products a continuity of supply of the small colored diamonds typical of the Argyle production.”

Still, the mine will produce only 60 percent of what it has historically. Because of this, Lieberherr expects prices to remain “very firm” over the next few years.

“The short-, medium-, and long-term demand outlook is good for small diamonds,” he says. “The amount of Argyle material traded in the market has more than halved over the last four years.”

Lieberherr says that Argyle will continue its promotional activities, including its Indo- Argyle Diamond Council and support for the National Colored Diamond Association.