In a major announcement, Rio Tinto brought a close to more than a year of speculation, by saying it aimed to retain its diamond assets after concluding a strategic review which looked at 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.”
De Beers and Alrosa were initially thought to be potential buyers, however in recent months industry analysts said the most likely buyer was Dominion Diamond Corp, formerly Harry Winston Diamond Corp.
It is possible that bids for Rio Tinto Diamonds' businesses – valued at more than $2 billion by analysts – were lower than Rio Tinto was willing to accept.
In additiom, Dominion said it was only interested in Rio's 60-percent holding in Diavik, and not its fully-owned Argyle mine in Australia or the 78-percent stake in the Murowa operation in Zimbabwe. Rio, on the other hand, likely was interested in selling the assets as a single package.
