MELBOURNE – Two of the world’s top diamonds producers are both shopping for deals, with Rio Tinto following De Beers in hunting for projects to replace aging operations and position for an improving global market outlook.

Rio is actively looking for more acquisitions after making a small investment in a project in Canada last year, Arnaud Soirat, CEO of its copper and diamonds unit, said in an interview in New York. “Our approach is very pragmatic. We are not looking for volumes, we are looking for value,” he said.

De Beers, a unit of Anglo American, last month completed a rare acquisition to add a project in Canada as it contends with the looming closures of some operations. Last year, billionaire Dennis Washington agreed to pay $1.2-billion to acquire Diamond’s stakes in mines in Canada’s Northwest Territories.

The sector is facing a peak in production in the coming years, according to Soirat, and producers are stepping up deal-making and exploration as there’s a lack of major developments to replace the older mines. With a strong outlook for consumer demand, De Beers was seeking new opportunities to invest in future supply potential, CEO Bruce Cleaver said in July.

London-based Rio is spending about 20% of its exploration budget – the second-largest share – to unearth new diamond deposits, Soirat said in the interview broadcast Tuesday on Bloomberg Television. It’s also reviewing extending operations at maturing mines in Australia and Canada to support production, he said.

Exploration also remains difficult and slow, with a large deposit likely to take about 15 years to bring into production, while demand continues to be supported by the US, with growth in sales to China and India, Rio’s Soirat said.

“When you look at this picture you can see in the coming years a market that could become under-supplied and therefore there are good trade opportunities,” he said.

Rio’s Argyle mine in Western Australia has sufficient reserves to operate until about 2020, while Diavik in Canada is likely to continue through 2025, according to filings.

Rio aims to retain exposure to diamonds – which accounts for only about 2% of revenue – even as it sheds other smaller or non-core businesses. The producer has agreed about $11-billion of asset sales since August 2016, and this year completed an exit from coal.

“Sometimes we say ‘small is beautiful’ and it’s particularly true for diamonds,” Soirat said. “It’s not a big business in volume and value, yet it’s a profitable business – it’s a business where we have a lot of know-how and a very strong reputation.”

Rio remains untroubled by the rise of laboratory-grown diamonds that are being targeted at younger consumers and sold for a fraction of the cost of natural stones. Producers including De Beers are beginning sales, adding new competition for mines in the $80 billion gem industry.

Synthetic gems are unlikely to compete with Rio’s products, particularly its colored offerings that include pink diamonds from Argyle, Soirat said. “Anyone can buy a copy of a Picasso painting, alright – but it’s a copy,” he said. “The Picasso is a one-off, it’s something which is rare, incredibly special and increasing in value. When you look at natural colored diamonds, it’s the same.”