UPDATE 3-Rio Tinto overhaul plan dented as diamond sale scrapped
* Diamonds sale pulled after 15 months
* Analysts estimate business worth more than $2 billion
* Iron ore, copper, coal, aluminium assets still on block
* Tough time for potential bidders to raise funding
* BHP Billiton ahead in asset sale race
By Sonali Paul and Clara Ferreira-Marques
MELBOURNE/LONDON, June 24 (Reuters) - Rio Tinto Ltd has scrapped the proposed sale of its $1.3 billion diamonds business, denting its plan to divest mines as it tightens operations during an industry downturn.
The world No.3 miner has at least half a dozen assets on the block, aiming to pare $19 billion in net debt, cut costs and boost returns to shareholders, but buyers are unwilling to pay up given volatile commodity prices and rising debt costs.
Rio had said last year it could sell its diamond unit - mines valued by analysts at as much as $2 billion - but which Rio said no longer fit its profile. Yet it struggled to find suitors for operations spread across Canada, Australia, India and Zimbabwe - or to secure enough appetite for a listing. Continued...