MELBOURNE — Rio Tinto Group, the world’s second-largest mining company, will keep its diamond businesses after failing to find a buyer and deciding not to pursue an initial public offering of the unit.
Bloomberg
“It is clear the best path to generate maximum value for our shareholders is to retain these businesses,” Rio Tinto Diamonds and Minerals chief executive Alan Davies said today in a statement.
The London-based company had been considering selling the assets since March 2012 and hired Morgan Stanley to oversee an IPO of the gem unit, a source familiar with the matter said June 3.
The unit — the world’s third-biggest producer of rough diamonds with mines in Canada, Australia and Zimbabwe — may be worth about $2,2 billion, Deutsche Bank AG said in a March 11 report.
Rio fell 1,6% to A$51,80 in Sydney trading. Australia’s benchmark S&P/ASX 200 index declined 1,4%.
The company is seeking to sell assets, reduce spending and curb costs amid slower demand and lower prices for some of the raw materials it produces.
