Buyers fail to take a shine to Rio Tinto’s diamonds arm
Diamonds are forever for mining giant Rio Tinto, which today scrapped plans to sell or float its $2 billion (£1.3 billion) precious stones division.
The world’s third-biggest miner had been looking to offload its diamonds business as part of plans to trim its $19 billion net debts, and boost returns to shareholders. Chief executive Sam Walsh had promised investors “significant cash proceeds” from asset sales, and Rio said in March that it was “reviewing whether we can create more value through a different ownership structure” of its diamonds business.
But today the miner’s diamonds and minerals chief executive Alan Davies admitted no deal had emerged. “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,” he said.
“The medium to long-term market fundamentals for diamonds remains 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 capitalise on the positive market outlook.” Rio Tinto produces about 12 per cent of the world’s diamonds, from mines including Argyle in Western Australia, which is the largest source of rare pink diamonds.
Rivals have also failed to seal deals as commodity prices languish. African Barrick Gold could not complete a stake sale to China National Gold in January, and Brazil’s Vale gave up its attempt to sell Australian mines. But rival BHP Billiton successfully sold its diamonds unit to Harry Winston, now called Dominion Diamond, last November.
While BHP has racked up more than $4.6 billion in asset sales in the past year, Rio has only managed to sell its Eagle nickel mine for $325 million.
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 3 How the language you speak changes your view of the world
- 4 The top 50 cities for young people to live in
General Election 2015: Fishing is on Nigel Farage's mind as he casts a line to the disaffected of Grimsby
Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
The man who filmed the Freddie Gray video has been arrested at gunpoint
Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
Russian warships accused of 'chasing away' Swedish vessel to prevent Baltic States from achieving energy independence
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...