Absent Decent Offers, Rio May Keep Diamond Assets

The possible sale of Rio Tinto Diamonds' assets has taken a new turn, with Rio Tinto chief executive officer Sam Walsh playing down the chances of it being sold if offers do not reach its valuation. In his first interview since taking over at the mining giant at the start of this year, Walsh said Rio would not be forced into selling off its diamond industry business, or any other underperforming assets. Instead, he aims to focus on reducing costs across the company. "This is not market day at the bazaar. I'd be quite happy to keep it," Walsh told Britain's Telegraph newspaper. The diamond business is estimated by industry analysts to have a value of at least $2 billion.

Canada's Dominion Diamond was considered by industry analysts to be most likely to buy Rio Tinto Diamonds, which includes a 60% stake in the Diavik diamond mine in Canada's Northwest Territories. Dominion already owns the other 40%. However, Rio Tinto is believed to want to sell its diamond operations in a single package and not individually, while Dominion CEO Robert Gannicott recently said the firm would only be interested in operations in Canada.

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