BHP Billiton and junior Australian miner Tawana Resources have agreed to jointly explore for diamonds in the Kimberley region of South Africa.

The project area, one of the most prolific diamond producing areas of the world, covers approximately 2,800 sq km.

Under a heads of agreement, BHP Billiton will join Tawana on a 70:30 basis, giving BHP the exclusive right to market any mine production of diamonds or other minerals produced in connection with the joint venture.

According to the agreement, Tawana will be the operator and has to raise a minimum of $1.5 million to conduct appraisal work within four months of gaining access rights. Drilling is to start within eight months.

Tawana could earn another 10 percent share in the joint venture if it completes a 25-ton mini-bulk sampling within five months of completion of Stage One.

Tawana has been exploring and evaluating diamond deposits in the area since 1999 and is the operator of the Perdevlei and Kareevlei Wes diamond projects.