Canada's Star Diamond objects to Rio Tinto push for joint venture meeting (updated)

Star Diamond

08/07/2021 18:43

(Adds Rio comment)
    TORONTO, July 8 (Reuters) - Junior miner Star Diamond Corp
 DIAM.TO  on Thursday said it objected to Rio Tinto's
 RIO.L  RIO.AX  "predatory and coercive" actions after the
global miner called a meeting for a joint venture the Canadian
company says does not yet exist.
    Rio Tinto responded by saying it "disagrees with Star
Diamond’s interpretations in all material respects."
    The companies have been in a long-running dispute over
development of Star Diamond's Star-Orion South Diamond Project
in the Canadian province of Saskatchewan.
    In 2017, Star Diamond entered an earn-in agreement with Rio
Tinto Exploration Canada Inc that gave the Anglo-Australian
miner an option to earn up to a 60% interest in the project. 
    Saskatoon-based Star Diamond later said Rio overspent on the
project while exercising its earn-in options before completing
and delivering results from its bulk sampling program. It said
Rio Tinto was trying to boost its stake at below market value. 
    Rio has spent roughly C$168 million to complete a 10-hole
bulk sample program that Rio told Star Diamond would originally
cost about C$18.5 million, the Canadian company said on
Thursday.
    "Rio Tinto now seeks to call a management committee meeting
that it has no legal right to call for a joint venture that Rio
Tinto knows has not been duly formed," Star Diamond said in a
release.
    A Rio Tinto spokesman said the miner has a right to call a
meeting of the management committee and that Star Diamond’s
latest attempt to prevent it from exercising that right was
denied by a court on June 24.
    A preliminary study in 2018 estimated 66 million carats of
diamonds could be recovered from the C$2 billion Star-Orion
project over a 38-year mine life.
    Rio faced similar acrimony with its junior partner Turquoise
Hill Resources  TRQ.TO  over expansion of the pair's Oyu Tolgoi
copper-gold mine in Mongolia, although that dispute was put to
bed in April.  urn:newsml:reuters.com:*:nL4N2M21N9

 (Reporting by Jeff Lewis; Editing by David Gregorio and Paul
Simao)
 ((Jeff.Lewis@thomsonreuters.com; +1 647 200 7236))