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 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
Shock poll shows voters believe Ukip is to the left of the Tories
New era of cheap oil 'will destroy green revolution'
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Ukip founder Alan Sked and Nigel Farage 'begged Enoch Powell to stand as a candidate'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
iJobs Money & Business
£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...
£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...
$125 - $175 per annum: Carlton Senior Appointments: Senior Wealth Manager In...
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...