* Diamonds arm could fetch around $2 bln – analyst
* Competing against BHP’s diamonds sale
* Diamonds business not big enough for Rio Tinto
* Rio shares up 0.6 percent, trailing broader market
By Sonali Paul and James Regan
MELBOURNE/SYDNEY, March 27 (Reuters) – Rio Tinto,
the world’s third-largest miner, effectively invited bids on
Tuesday for its diamonds business, on its books at $1.2 billion,
and joined rival BHP Billiton in backing away from a
business that has lost its sparkle.
Rio Tinto, which runs three mines in Australia,
Canada and Africa, said it was reviewing its diamond business
and would consider selling it, as it focuses on expanding in
more profitable commodities such as iron ore, copper and
uranium.
Its diamond business – the 100 percent-owned Argyle mine in
Australia, famous for its pink diamonds, as well as 60
percent-owned Diavik mine in Canada and 78 percent-owned Murowa
mine in Zimbabwe – could come on the market at the same time as
BHP Billiton tries to sell its Ekati diamond mine in
Canada.
“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’s
diamonds and minerals CEO Harry Kenyon-Slaney said in a
statement.
Continued…
