Rio Tinto Group, the world’s third- largest mining company, is considering selling its diamond assets because the mines may no longer fit its strategy, joining BHP Billiton Ltd. (BHP) in a similar sale process.

Rio operates the Argyle mine in Australia, has a 60 percent stake in Diavik in Canada, and a 78 percent holding in Murowa in Zimbabwe, the London-based company said in a statement today. It also has Bunder, an advanced diamonds project in India.

 

Enlarge image

A heart-shaped pink diamond from the Rio Tinto Group Argyle Pink Tender is displayed in Sydney, Australia. Rio Tinto's Argyle mine supplies 90 percent of the world's pink diamonds. Photographer: Ian Waldie/Bloomberg

“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,” Harry Kenyon- Slaney, chief executive officer of Rio’s diamonds and minerals unit, said.“We regularly review our businesses to ensure they remain aligned with Rio Tinto’s strategy of operating large, long-life, expandable assets.”

BHP said its diamond mines may no longer fit with its strategy of investing in “large, long life” assets.

“This process may take some time,” Kenyon-Slaney said. “In the meantime we are reassuring employees and the governments in the states and countries where we operate that it is very much business as usual.”

Rio shares gained 0.6 percent to A$64.12 at 12:10 p.m. Sydney time.

To contact the reporter on this story: Soraya Permatasari in Melbourne atsoraya@bloomberg.net

To contact the editors responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net; Andrew Hobbs at ahobbs4@bloomberg.net

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