Rio Tinto (LON:RIO) is considering selling its non-core diamond business following a similar move by fellow mining giant BHP Billiton (LON:BLT).
“Rio Tinto has begun a strategic review of its diamond business that will include exploring a range of options for potential divestment of its diamond interests,” the group said in a statement today.
Back in November, BHP said it will look into selling its Ekati diamond mine in Canada. A month later, the group disposed of its majority stake in the Chidliak project, which is also located in Canada.
Rio’s diamond business owns the Argyle mine in Australia and holds stakes of 60 per cent and 78 per cent in the Diavik mine in Canada and the Murowa mine in Zimbabwe respectively.
The group also has a 100 per cent interest in Bunder, an advanced diamonds project in India.
“The diamonds market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply,” said chief executive of the Diamonds & Minerals business Harry Kenyon-Slaney.
“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.”
The group added that the process “may take some time”.
Shares in Rio rose one per cent to trade at 3,396.5 pence in early deals, giving it a market cap of £47.93 million.