Rio Tinto looks for ways to get more glitter from its diamond arm
by: Sarah-Jane Tasker
From:The Australian
March 27, 201212:39PM
MINING giant Rio Tinto is looking to divest its diamond interests with a review underway to explore options to create greater value from the business.
The diversified miner’s chief executive of diamonds and minerals, Harry Kenyon-Slaney, said the company regularly reviewed its businesses to ensure they were aligned with Rio’s strategy of operating large, long-life, expandable assets.
“The diamonds market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply,” he said.
“We have a valuable, high quality diamonds business, but given its scale we are reviewing whether we can create more value through a different ownership structure.”
Rio Tinto operates three diamond mines, including the Argyle mine in Australia, Diavik in Canada - in which it has a 60 per cent interest - and Murowa in Zimbabwe, in which Rio holds a 78 per cent stake.
The company also has a 100-per cent interest in Bunder, an advanced diamonds project in India.
The world’s largest miner, BHP Billiton, had said last November it might look to sell some or all of its diamond operations.
Earlier this month it was reported that Canada's Harry Winston Diamond Corp and groups led by KKR and Apollo Global Management were in talks to buy BHP Billiton's Ekati diamond mine in Canada. The sale could fetch $US500 million.
Announcing its diamond review today, Rio said the process could take some time and that for employees and the governments in the states and countries it operates in, it was very much business as usual.