Rio Tinto to float diamond business

Speculation is mounting that Rio Tinto is looking to float its diamond business as the company moves to get out of the sector.

The move by Rio to break away from the diamond game has been on the company’s agenda since early this year after the company announced 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.

WAbusiness reports that a new company is being packaged by the mining giant for listing on the London stock exchange.

Rio Tinto reportedly plans to retain a 40% stake in the new business which will have WA’s Argyle mine and the Daivik mine in Canada as its major producing assets.

The move by Rio comes after BHP Billiton sold its stake of the Ekati diamond mine in Canada for $500 million.

‘‘The divestment of EKATI is consistent with our focus on large, long-life, low-cost, expandable, upstream assets and together with the recent sale of our interests in Richards Bay Minerals and Yeelirrie, reflects our ongoing pursuit of a simpler business,’’ BHP’s chief of non-ferrous, Andrew Mackenzie said.

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