In a surprise announcement that follows a similar move from BHP, Rio Tinto has announced it is considering exiting the diamond business.
On March 27, the company said it has launched “a strategic review of its diamond business that will include exploring a range of options for potential divestment of its diamond interests.”
Rio Tinto operates three diamond mines: Argyle in Australia (100 percent interest), Diavik in Canada (60 percent interest), and Murowa in Zimbabwe (78 percent interest). It also has an “advanced diamond project” in India called Bunder.
Like BHP, Rio Tinto said the lack of scale of the diamond business caused it to reconsider its holdings.
“We regularly review our businesses to ensure they remain aligned with Rio Tinto’s strategy of operating large, long-life, expandable assets,” Harry Kenyon-Slaney, chief executive of Diamonds & Minerals, said in a statement. “The diamond market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply. We have a valuable, high quality diamond business, but given its scale we are reviewing whether we can create more value through a different ownership structure.”
Kenyon-Slaney cautioned the process “may take some time.”
“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,” he added.