KKR has backed down from buying a BHP Biliton’s Ekati diamond mine in Canada. The move puts in question the corporate-global demand for diamond assets and paints an uncertain outcome for diamond giant Rio Tinto’s diamond assets—which the company is also in the process of selling.

Sources say BHP’s Ekati mine is worth between $750 million-$1.2 billion and some experts believe that a private equity firm would be a better fit for the sale. Sources say that it is unlikely that Rio Tinto will merge with BHP Biliton. Some sources have said that De Beers has shown interest, although legal obstacles may prevent De Beers from acting on such a move. BHP has also commented that it may end up holding onto Ekati.

Meanwhile, Rio Tinto has hired Morgan Stanley to explore options for its diamond division, valued at $2 billion, and appears to show a lot of flexibility in its sales strategy, such as selling its mines piecemeal.  Very few buyers have the capital to acquire an operation such as Rio’s.

 “Rio is at pains to tell anyone that will listen that it has not decided to push the button on a sale. Clearly it doesn’t fit with their broader strategy, but having seen the BHP process, they will be reticent to kick theirs off,” said an expert.

Despite issues in the sale of large scale mining operations and diamond assets, the diamond market remains strong and is predicted to experience continued growth, mainly from emerging markets such as China.