Rio Tinto reported in late March 2012 that it had begun a strategic review of its diamond business that will include exploring a range of options for potential divestment of its diamond interests.
Rio Tinto is one of the world’s major diamond producers through its 100% ownership of the Argyle mine in Australia, 60% interest in the Diavik mine in Canada, and 78% interest in the Murowa mine in Zimbabwe. These three mines combine to produce a full range of diamonds for all market segments. Rio Tinto also has a 100% interest in the Bunder advanced diamond project in Madhya Pradesh, India.
Rio Tinto’s share of the production from the three operating mines is sold through its sales and marketing headquarters in Antwerp, with representative offices in Mumbai, Hong Kong and New York. It also operates a niche cutting and polishing factory in Perth for the rare pink diamonds from its Argyle mine, which produces more than 90% of the world’s pink diamonds.
Harry Kenyon-Slaney, chief executive of Rio Tinto Diamonds and Minerals, said, “We regularly review our businesses to ensure they remain aligned with Rio Tinto’s strategy of operating large, long-life, expandable assets. The diamonds market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply. 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. This process may take some time. We’re committed to keeping stakeholders informed about any key developments and in the meantime are reassuring employees and the governments in the states and countries where we operate that it is very much business as usual.”
Other recent news from Rio Tinto Diamonds included an announcement in late March of discovery of Australia’s largest pink rough diamond at the Argyle mine. The 12.76-carat diamond will be known as the Argyle Pink Jubilee. When it has been cut and polished, it will be graded by a team of international experts and showcased to the world before being sold as part of Rio Tinto’s “Argyle Pink Diamonds Tender” later this year.
And, in early April, Rio Tinto reported that the first rough diamonds from the Bunder project in India were ready for finishing. The occasion was marked by a private event in Bhopal to hand over the first rough gems to selected Indian diamantaires for cutting and polishing. The diamonds will be carefully transformed by master craftsmen at factories in India, with detailed tracking of each step of the manufacturing process. The aim is to understand the nature of the product and its potential for future commercial production.
The Bunder gems will be displayed at the Indian International Jewelry Show in Mumbai in August. They will not be available for sale.