Australian diamond giants Rio Tinto and BHP Billiton have reported mixed financial results from the second half of 2011 and may sell all or some of their diamond businesses.

Both companies recorded drops in 2011 from their previous years and both announced revaluations of their diamond assets last December. Rio Tinto plans to re-assess its diamond assets this year and BHP may sell its stakes in the Ekati diamond mine. BHP Biliton has described its operations in Ekati as only having “limited growth.”

“Ekati is a mature mine and its best days are probably behind it…They’re [BHP] probably looking at selling this when it still has some life left and they can get some money for it,” said a prominent London analyst.

Potential buyers of the Ekati mine include Russian diamond mining company Alrosa and Canadian company Harry Winston Diamonds, who owns Diavik mine.

Rio Tinto’s Argyle mine was hard hit by heavy rains in 2011 that resulted in lower production and operations' cost increases. Total production from Rio Tinto’s three mines declined 15 percent. About  80% of Australia’s diamonds and 90% of the world's pink and red diamonds are sourced from the Argyle mine.

“They are cash intensive and if floated they would have a higher multiple than currently exists within a larger mining house,” said a Citigroup report about the mine.  

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