BHP Billiton’s Diamond Production Continues to Decline

BHP Billiton, the world’s largest diversified miner, is seeing its diamond production continually declining. During the first three quarters of the fiscal year production from its 80 percent owned Ekati mine in Canada fell 38 percent.

BHP mined 802,000 carats during the last quarter ended March 31, down 21 percent from 1,015,000 carats mined during the same quarter in 2004, and an 8 percent drop compared to the 872,000 carats mined during the previous quarter that ended December 31.

The year to date figures show a reduction of 38 percent to 2,660,000 carats mined during the first three quarters of the fiscal year, compared to 4,271,000 mined during the first three quarters of the previous fiscal year.

The miner says the underground project at the Panda pit, Ekati’s main pit, approved in May 2004, will be a 2,600 tons per day sub-level retreat mine that will deliver approximately 4.6 million tons of ore and 4.7 million carats of rough diamonds to the Ekati process plant over a 6 year production life.

This is a yield of 0.98 carats per ton ore (cpt), compared to 1.27 cpt during the past nine months and the even worse 1.37 cpt during the past quarter alone.

BHP says the underground mine development is on schedule while construction activities associated with the mine surface facilities are nearing completion.

“First ore production was successfully achieved to schedule on 26 April 2005, with full production expected in early 2006. Development costs are estimated at $182 million,” the company said in a statement. BHP Billiton’s share of the costs is $146 million.

The miner is also continuing diamond exploration activities in Botswana, Namibia and Angola.