* Diamonds arm could fetch around $2-$2.4 bln – analysts
* Competing against BHP’s diamonds sale
* Diamonds business not big enough for Rio Tinto
By Sonali Paul and Clara Ferreira-Marques
MELBOURNE/LONDON, 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 BHP Billiton in a retreat from an industry
that has lost its sparkle for mining majors.
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 scaleable and 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 — comes on the market at the same time as BHP
Billiton tries to sell its EKATI diamond mine in Canada.
“It’s a great business in terms of diamonds, but I think
that in terms of the scale, it ceased to have the meaningful
place (for Rio) that it used to have, so we are looking at a
number of options, including selling,” Rio Tinto Chief Financial
Officer Guy Elliott told the Reuters Mining and Metals Summit,
hours after the review was announced.
He said Rio had not yet made any decision about how it could
sell the assets or what ownership structures it would consider.
Continued…
