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Aber Diamond Corp.'s chief executive officer said Thursday the diamond miner and retailer would try to exercise its right to buy the remaining stake in the Diavik mine if it were to come up for sale, but warned he had no confirmation of a media report that co-owner Rio Tinto PLC was considering shedding the property.
“If they ever should want to decide that they sell, we have a right to buy it and we would do our best to exercise that right,” Robert Gannicott said in a telephone interview.
“We haven't heard anything about it. I think it's just a rumour at this stage, but we actually have a first right of refusal to purchase that interest from Rio, so, yes, of course we'd be interested.”
His comments came after an Australian newspaper reported that Anglo-Australian mining giant Rio Tinto was close to deciding whether to sell its diamond operations — comprising the Argyle mine is Western Australia and the Diavik mine in Canada's Northwest Territories.
Aber owns 40 per cent of Diavik, as well as all of the Harry Winston high-end jewellery store chain. Aber shareholders approved a name change to Harry Winston Diamond Corp. in June in a bid to take advantage of the internationally recognized brand of the company's retail division.
Rio Tinto owns 60 per cent of Diavik and conducts the exploration work at the mine. It has been reviewing its operations in light of its $38.1-billion takeover of Alcan Inc.
A spokesman for Rio Tinto said the company didn't comment on market rumour or speculation, and Mr. Gannicott said the company had not approached Aber about a possible sale.
Mr. Gannicott attributed the speculation about Diavik to the Alcan deal, saying that people have been trying to guess what businesses Rio Tinto may want to discard as a result of the purchase.
And while he wouldn't comment on what price the stake in Diavik may fetch, he said full ownership “would give [Aber] a stronger position in the word of diamond sales and purchases.”
“A bigger volume running through our existing business would be more efficient for us.”
Diavik is one of the few producing diamond mines in the Northwest Territories, along with the Ekati diamond mine, located about 300 kilometres northeast of Yellowknife and owned by BHP Billiton Ltd.
