Rio Tinto Decides to Retain Diamond Businesses

Global mining giant Rio Tinto said that following a strategic review of its business, it decided to keep its diamond assets which some analysts have valued at more than $2 billion.

Rio Tinto Diamonds includes the 100-percent owned Argyle mine, a 60-percent holding in the Diavik mine in Canada’s NorthWest Territories, a 78-percent stake in the Murowa mine in Zimbabwe, and a and 100-percent holding in the Bunder project in India.

The decision to retain the diamond units followed a review of its non-core businesses that lasted more than a year after the company in a bid to slash its net debt by $19 billion.

Rio Tinto Diamonds head Alan Davies said the decision not to divest from the diamond sector was based on the strong medium to long-term market fundamentals for diamonds which he described as being “robust”.

There is growing demand in Asia for luxury goods, and ongoing strong demand in North America. He said the firm’s assets are of high-quality diamonds that are well suited to a rising market outlook. In addition, keeping its diamond business would provide value for shareholders which new Rio Tinto CEO Sam Walsh has repeatedly said is a key aim.

Upbeat forecast for the diamond sector: identifying a positive market outlook, Rio Tinto has decided to keep its diamond assets in Australia, Canada, Zimbabwe and India.