Rio looking to offload diamonds

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Rio Tinto has followed BHP Billiton’s lead in considering selling off its diamond assets.

In a statement today Rio said it had begun a "strategic review" of its business that would include looking for potential buyers for its diamond assets.

The company’s only diamond project in Australia is the Argyle mine in WA, where the largest ever pink rough diamond was uncovered earlier this year.

Rio also holds controlling interests in the Diavik project in Canada, the Murowa project in Zimbabwe, and the Bunder development in India.

Rio Tinto said while the diamond market was still positive the sector was small and big companies were better suited to other sectors.

"The diamonds market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply," it said.

"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."

In January market researcher IBISWorld said diamond mining would be one of the fastest growing industries in Australia in 2012.

It said while the business had delivered five consecutive years of decline due to low production it was set for a strong rebound this year.

According to IBISWorld diamond and gemstone mining will rake in $599.9 million in 2012, up 36 per cent on 2011’s earnings.

Last year BHP Billiton also announced it was reviewing its diamond assets in the hope of sealing a full or partial sale.

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