Rio Tinto plans a spin-off of its diamond division that could entail one of the biggest floats on the London Stock Exchange this year as well as raising hundreds of millions of dollars. Rio and its advisers, Morgan Stanley Bank, are drawing up plans for a separate listing of the unit, reports Sky News. The flotation plan is increasingly likely since the firm has been unable to identify a buyer willing to meet its asking price, the report says.

The listing of the diamond unit, which has been given the codename Project Aurora, could take place as soon as the fall, and may involve seeking to raise around $400 million by selling new shares in the business, Sky cited sources as saying. Rio's diamond unit has been on the block for the past year, with Sky saying some analysts estimated it could be worth as much as $5 billion.



The flotation is not a certainty and would be left on the shelf if Rio were to receive a sufficiently high offer from a bidder, the report said.



Rio's diamond industry business includes the Argyle mine in Western Australia, a 60% stake in the Diavik mine in Canada, and 78% of the Murowa mine in Zimbabwe. The division also includes a cutting and polishing factory in Perth for the rare pink diamonds from the Argyle mine.