RIO TINTO, the world’s third-largest miner, effectively invited bids for its diamonds business, on its books at $1.2 billion, and joined rival BHP Billiton in a retreat from an industry that has lost its appeal.

Rio Tinto, which runs three mines in Australia, Canada and Africa, said it was reviewing its diamond business and would consider selling it, as it focuses on expanding in more profitable commodities such as iron ore, copper and uranium.

Its diamond business – the 100 per cent-owned Argyle mine in Australia, famous for its pink diamonds, as well as 60 per cent-owned Diavik mine in Canada and 78 per cent-owned Murowa mine in Zimbabwe – could come on the market at the same time as BHP Billiton tries to sell its Ekati diamond mine in Canada.

Deutsche Bank valued Rio Tinto’s diamond business, which accounts for less than 2 per cent of core profit, at some $2.4 billion.

It could attract the same bidders in the running for BHP’s Ekati diamond mine stake, including private equity firm KKR and luxury jeweller Harry Winston, which already has a 40 per cent stake in Rio’s Diavik mine. – (Reuters)