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Rio Tinto rethinks diamond business

Global mining giant Rio Tinto (ASX:RIO) has announced the completion of its $6.65 billion share buy-back program as it considers selling its diamond businesses.

More than 116,000,000 shares were purchased at an average price of $56.80 in the buy-back.

“At March 26, 2012, Rio Tinto held 14,567,573 shares in treasury and 1,410,807,893 shares were in public hands,” the company says.

Also today, Rio Tinto announced a review of its diamond businesses that could include selling all or part of them.

Rio Tinto operates the Argyle diamond mine in Australia (100% interest), Diavik in Canada (60% interest) and Murowa in Zimbabwe (78% interest), and has an 100% interest in the Bunder advanced diamonds project in India.

Harry Kenyon-Slaney, chief executive the company’s diamonds and minerals business, says the outlook for the diamonds market is positive, with demand growing and a lack of new discoveries limiting supply.

“We have a valuable, high-quality diamonds business, but given its scale we are reviewing whether we can create more value through a different ownership structure. This process may take some time,” Kenyon-Slaney say.

Rio Tinto (ASX:RIO) was up 0.35% today to $63.97 and is listed on the Australian, New York and London stock exchanges.

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