About three months after BHP Billiton announced it was reviewing the future of its diamonds business with a view to selling it, Rio Tinto has followed suit with its own strategic review. The decisions of both of the big miners to question the future of diamonds within their portfolios might, at face value, appear odd. The fundamentals for the sector appear quite solid, with rising demand and little new supply. Demand for diamonds tends to grow with living standards and therefore they lag peaks in demand for hard commodities like iron ore or copper. Rio itself expects demand from India and China to double by the end of this decade. So why sell?
See http://www.businessspectator.com.au/bs.nsf/Article/Rio-diamonds-BHP-Argyle-sale-future-portfolio-De-B-pd20120327-SS5V5?opendocument&src=rss.
See also Rio Tinto, BHP May Leave Diamond Industry, http://www.thejakartaglobe.com/business/rio-tinto-bhp-may-leave-diamond-industry/507736?utm_source=newsletter&utm_medium=email&utm_campaign=jgnewsletter.