When Rio Tinto Group chief Jean-Sebastien Jacques took the reins of the world’s second-biggest mining company in July, there was speculation he’d sell a host of less desirable mines and smelters.
The firm’s diamond business, underpinned by two underground mines, was considered by some analysts as a candidate to be divested or spun out, particularly after it was combined with the copper unit. In a Bloomberg Television interview Tuesday, Chief Executive Officer Jacques earmarked the division as a focus for expansion rather than disposal.
“What we want is to improve the quality of our portfolio,” said the Frenchman, who’s known as JS. “I would love to have more diamonds to be very explicit. That’s a priority area.”
Rio is one of the world’s largest producers of rough diamonds and controls a mine in Canada and another in Australia. It also runs a sales and marketing business, employing 2,000 people globally.
Rough-diamond prices rose about 9 percent this year, recovering from their biggest annual drop since 2008, as top producers De Beers and Alrosa PJSC cut supply. They held back stones from the market in late 2015 after China’s slowdown and an industrywide credit crunch curbed buying. Prices have also benefited from better U.S. demand.
For the rest of this article, click here: https://www.bloomberg.com/news/articles/2016-12-06/diamonds-are-forever-for-rio-tinto-as-ceo-seeks-mines-not-sales