By Michelle Smith — Exclusive to Diamond Investing News
In less than six months, three large players have expressed interest in getting out of the d iamond 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.