Anglo-Australian mining giant Rio Tinto Plc (RIO, RIO.L, RIO.AX) is pursuing an initial public offering of its diamond unit, after it failed to find a buyer for the division, Bloomberg said Monday citing a person familiar with the matter.
In March 2012, the Group had initiated a strategic review of the diamond business, which included exploring options for potential divestment of the interests, and it is said that the firm is still open to offers for the unit.
Rio Tinto is reportedly looking to spin-off its diamonds business into a separately traded company, with listing on the London Stock Exchange, which could be worth up to $5 billion.
Rio Tinto is the third-largest producer of rough diamonds in the world by volume, behind Alrosa Co. and De Beers, and also the world's largest producer of colored diamonds.
The diamond unit, with mines in Canada, Australia and Zimbabwe, is reportedly said to be worth about $2.2 billion. The diamonds business includes Rio Tinto's 100 percent interests in the Argyle Diamond Mine in Australia and the Bunder Diamond Mine in India, as well as its 60 percent interest in the Diavik Diamond Mine in Canada and 78 percent interest in the Murowa Diamond Mine in Zimbabwe.
Recent reports have suggested that Rio is also close to offloading its 60 percent stake in the Diavik diamond mine in Canada. The company also operates a niche cutting and polishing factory in Perth for the rare pink diamonds from its Argyle mine.
Rio Tinto has recently announced the potential sale of its Pacific Aluminum unit, and is seeking to sell its Canadian iron ore operations.
According to media reports on Sunday, commodities trading giant Glencore Xstrata plc (GLEN.L, GLNCY) and private-equity giant Blackstone Group LP (BX) are among the suitors looking to float bids for the Canadian iron-ore operations of Rio Tinto.
In mid-February, Rio Tinto reported a loss for full-year 2012, reflecting price decline in all of its major commodities as well as $14.36 billion impairment charges.
In London, Rio Tinto shares are currently trading at 2,870 pence, up 13 pence or 0.46 percent, on a volume of 1.32 million shares.
RIO closed Friday's regular trading session at $42.72, down $1.82 or 4.09% on a volume of 4.99 million shares.
RIO.AX trades at A$53.80, down 2.50 percent, on a volume of 2.70 million shares.
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