Rio Tinto will invest $803m in order to increase production at its Argyle diamond mine in Western Australia (WA).
The investment will cover project development and construction of extraction services, crushers, a conveyer and pump stations for the underground block cave project at its Argyle mine in the Kimberley region of north-west WA.
Rio Tinto said it expects to produce nine million tons a year by 2013 from the project, which will extend the mine life until at least 2019.
Construction of an underground mine to complement the existing open-pit operation will be launched in the first half of 2011.
Argyle diamond mine produces 20% of global diamond supply and is the world's largest producer of pink diamonds.