Miner Rio Tinto scraps plans to sell £845.8m diamond business

Miner Rio Tinto has scrapped plans to sell its £845.8m diamonds business (release). The company needs to pare $19bn in debt, and aims to cut costs to boost returns to shareholders.

Rio's Diamonds and Minerals chief executive Alan Davies said there was a positive market outlook for diamonds:

After considering a number of alternative strategic ownership options it is clear the best path to generate maximum value for our shareholders is to retain these businesses.

Paul Xiradis, chief executive of Ausbil Dexia, which owns Rio Tinto shares:

In resource land it's just a little bit tough at the moment.

The market would have preferred for Rio to sell [diamonds] ... but if you're not going to achieve the right price, there's no point in cutting off your nose to spite your face just to achieve an end.