Rio Tinto and BHP Billiton are considering a A$1bn tie-up of their Canadian diamond operations, according to The Australian.

BHP is thought to have sent a team to Canada to look into how the firms could combine their diamond mines, which are adjacent to each other, the news service said.

Rio’s Diavik operation and BHP’s Ekati operation are located near Yellowknife, the capital of Canada’s Northwest Territories.

BHP previously attempted to takeover Rio for A$135bn and the pair already have joint ventures covering an iron ore project in Australia’s Pilbara region and the Escondida copper mine in Chile.