Reassessment Of Diamond Properties: A Trend?
By Michelle Smith — Exclusive to Diamond Investing News
In less than six months, three large players have expressed interest in getting out of the diamond business. The latest is Rio Tinto (NYSE:RIO,LSE:RIO, ASX:RIO), which announced on March 27 that it is engaged in a strategic review of its diamond business. The review includes exploring a range of options for the potential divestment of its diamond operations.
Rio's diamond operations include the wholly-owned Argyle mine in Australia, where a $2.1 billion underground expansion program is underway, a 60 percent stake in the Diavik mine in Canada, and a 78 percent stake in the Murowa mine in Zimbabwe. The company also owns the Bunder advanced diamond project in India, where the first production is now being cut and polished, as well as sales and marketing and cutting and polishing divisions.Harry Kenyon-Slaney, Chief Executive of Diamonds & Minerals at Rio, said “[w]e regularly review our businesses to ensure they remain aligned with Rio Tinto's strategy of operating large, long-life, expandable assets.” “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,” he continued. Rio's announcement follows that of another diversified miner, BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT). On November 30, BHP announced that it was reviewing its diamond business, which at the time consisted of an 80 percent interest in the Ekati mine and a 51 percent stake in the Chidliak exploration project, both in Canada. The review, BHP said, was due to the company's strategy of investing in large, long-life, upstream, expandable assets while remaining a simple and scalable organization.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV