Rio Tinto Keeping Diamond Businesses
June 24, 13
(IDEX Online News) – Rio Tinto has ended more than a year of speculation, by deciding to retain its diamonds businesses after concluding a strategic review which considered a range of options, including potential divestment. 
Rio Tinto Diamonds & Minerals Chief Executive Alan Davies said: “The medium to long-term market fundamentals for diamonds remain robust, fuelled by growing demand for luxury goods in Asia and continuing strong demand in North America.
“We have valuable, high-quality diamonds businesses that are well positioned to capitalize on the positive market outlook. After considering a number of alternative strategic ownership options it is clear the best path to generate maximum value for our shareholders is to retain these businesses.”
Initially, it was speculated that the largest diamond producers, De Beers and Alrosa, could be potential buyers, although in recent months industry analysts said the most suited buyer would be Dominion Diamond Corp, formerly Harry Winston Diamond Corp.
It is likely that bids for Rio Tinto Diamonds' assets – valued at more than $2 billion – were lower than Rio Tinto was willing to accept.
Buyers such as Dominion also said they were interested in only its 60-percent holding in Diavik and not its Argyle mine in Australia and 78-percent stake in the Murowa operation in Zimbabwe, while Rio likely was interested in selling the assets as a single package.