Petra Diamonds HmltnGrey Market
Thu, Dec. 8, 6:45 PM
- Rio Tinto (NYSE:RIO) CEO Jean-Sebastien Jacques said this week that he is on the hunt for new diamond mines, but with more than half the industry controlled by just two companies and new discoveries rare, finding them will not be easy, Bloomberg reports.
- Analysts say Rio could look for a trophy producer such as Anglo American's (OTCPK:AAUKF, OTCPK:AAUKY) De Beers unit, but Anglo sees diamonds as a core part of its future; Rio could pursue Anglo outright, but that would involve taking on many mines it would not want.
- Rio tried last year to by the 40% in Canada's Diavik mine from Dominion Diamond (NYSE:DDC) that it does not already own, but the deal was rejected internally before reaching the board level; it also could try to buy the company outright.
- Another option could be to buy Mountain Province Diamonds’ (NYSEMKT:MDM) 49% stake in Canada's Gahcho Kue mine; otherwise, a remaining handful of smaller producers such as Petra Diamonds (OTC:PDMDF), Lucara Diamond (OTCPK:LUCRF) and Gem Diamonds (OTC:GMDMF) likely would not make a material impact in Rio’s business.
- Even if Rio resorts to exploration, new deposits are so hard to find that most of the industry, which has spent $7B in exploration since 2000, has all but given up.
Mon, Oct. 24, 8:59 AM
Mon, Sep. 19, 8:45 AM