US BUYOUT giant KKR has emerged as one of the frontrunners to snap up the diamond businesses put up for sale by mining giants BHP Billiton and Rio Tinto.
The listed private equity house wants to create the world’s third-largest diamond miner to challenge De Beers and Alrosa.
It is believed to be competing with Canadian firms Harry Winston, a jeweller and miner, and Stornoway, a diamond exploration firm, in the race to buy BHP’s Ekati diamond mine, located near the Arctic Circle in Canada. Any deal would not be done until the second half of the year, City A.M. understands.
Ekati could be sold for around $750m (£473m). It is the cornerstone of BHP’s diamond business although last year the company said it was thinking of pulling out of the trade.
KKR, a $62bn asset manager that owns Toys R Us and Pets at Home, has reportedly appointed industry veteran Brian Menell as an adviser. It wants to combine Ekati with the diamond business put up for sale by Rio Tinto, which wants to focus on expanding in more profitable areas like iron ore, copper and uranium.
Rio’s diamond business, which could go for $2bn, is made up of the 100 per cent-owned Argyle mine in Australia, famous for its pink diamonds, as well as 60 per cent-owned Diavik mine in Canada and 78 per cent-owned Murowa mine in Zimbabwe.
KKR and BHP declined to comment. Rio could not be reached.