RESOURCES giant Rio Tinto has struck back at diamond dealer DeBeers’ plans to force the Argyle Diamond Mine back into its Central Selling Organisation.
Rio has offered $1.85 in cash or one Rio Tinto share for every 15 Ashton shares which helped push Ashton’s share price over the $2 mark this week.
DeBeers launched a $1.62 bid for Rio’s Argyle Diamond Mine partner Ashton in July.
Ashton owns 40 per cent of the Argyle Diamond Mine. It bought 19.9 per cent of Ashton from Malaysian Mining Corp on July 31.
In 1996 the Ashton-Rio duo walked away from the DeBeers’ Central Selling Organisation and set up its own diamond marketing concern.
The Argyle product is one of the fastest growing sectors in the world diamond market and DeBeers has no control over it.
With a hold of 40 per cent of the Argyle product, DeBeers can force the Argyle product back under its control.
The remaining 60 per cent of Argyle’s production is not believed to be enough to sustain a separate marketing operation.
Rio Tinto recently beat DeBeer’s associate Anglo to iron ore and forestry company North Limited.
