Rio to keep unwanted diamond division Tempting, but no sale: investors remain wary of commodity businesses. Rio Tinto has scrapped the sale of its diamond businesses after failing to find a buyer despite 15 months of trying, amid sliding commodities prices and caution toward resources takeovers. The decision casts doubt on the miner's ability to push through its other planned asset sales in iron ore, aluminium, copper and coal, designed to trim costs and pare back the $19 billion in net debt weighing down its balance sheet. Rio had considered listing its diamonds businesses when it became apparent a buyer was not forthcoming, but poor market conditions also put paid to that idea. "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," said Alan Davies, chief executive of Rio Tinto's diamonds and minerals division. He said the "medium to long-term" outlook for diamonds remained robust, fuelled by growing demand for luxury goods in Asia, and continuing strong demand in North America. The diamond arm, with operations in Australia, Canada and Zimbabwe, including its prized West Australian Argyle mine, reported a $US43 million ($47 million) loss last year. It is the world's third-biggest producer of rough diamonds with a book value of $US1.3 billion, though a recent Deutsche Bank report valued it at $US2.2 billion. The chances of Rio securing a sale dimmed when likely buyer Dominion Diamond Corporation, then known as Harry Winston, bought BHP's diamond arm instead in November. But Rio has maintained that it was not conducting a fire sale of its assets. If it's still generating good cash and profits, well then you keep it until someone pops along and says they really want the asset. It's not a big negative," said Vince Pisani, an analyst at Shaw Stockbroking. Other non-core assets Rio is said to be hoping to sell include Pacific Aluminium, a majority stake in Iron Ore Co of Canada, and its 29 per cent stake in Coal & Allied. Rio shares fell $1.12 to $51.54.