Without buyers, Rio Tinto holds on to its diamonds
World no.3 miner Rio Tinto has decided not to sell its diamond interests in Australia, Canada and Zimbabwe.
Rio had a handful of “assets on the block, aiming to pare $19 billion in net debt, cut costs and boost returns to shareholders, but buyers are unwilling to pay up in face of volatile commodity prices and rising debt costs,” Sonali Paul reported for Reuters Monday.
The company claims that its changing course as a result of a review, which finds that the “long-term outlook for diamonds is positive, fueled by demand for luxury goods in Asia,” and North America, Australia Network News reported Sunday.
“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,” diamonds and minerals chief executive Alan Davies said in a statement to the Australian Securities Exchange.
Rio’s diamonds unit, which includes the Argyle diamond mine in the Pilbara reported a profit loss of $43 million in 2012, down from a $10 million profit in 2011.