Bloomberg News

Rio Tinto CEO Sees Many Interested Buyers for Diamond Unit

May 03, 2012

Rio Tinto Group (RIO), the world’s third- largest mining company, said there are many groups are interested in buying its diamond unit.

“Smaller businesses that require quite a bit of capital may be better owned by someone besides Rio Tinto,” Tom Albanese, chief executive officer of the London-based company, said in a recording of a speech he gave today in Sydney. “There’s no shortage of people who are interested.”

Rio said March 27 it was considering selling its diamond assets because the mines in Canada, Australia and Zimbabwe no longer fit its strategy. The unit may be worth $2.56 billion, according to a March valuation by Bank of America Corp. Rio’s move follows a similar sale process by BHP Billiton Ltd. (BHP)

“Diamonds have great fundamentals for supply, great fundamentals for demand, but I would say one of the consequences of rising capital intensity and also the call of shareholders for returns” means the company cannot do so many projects at the same time, Albanese said.

KKR & Co. plans to combine Rio’s and BHP’s diamonds assets, the Sunday Times reported April 15, without saying where it got the information.

To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net

To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net


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