BHP Billiton Declares Long Term Commitment to Diamonds

BHP Billiton, owner of the Ekati diamond mine and the world's largest diversified miner, says it is committed to diamond mining and that Ekati is its entry point, far from being an asset with a ‘for sale’ sign.

To that end, the company is continuing its exploration efforts in Botswana and Namibia, while in Angola it has a partnership with AIM listed Petra Diamonds, a junior miner.

When asked at the Mines to Market Conference in Mumbai, India last week about continued speculation that Ekati is for sale, the mine’s President and COO Wayne Isaacs said, “There is nothing we can do about speculation, but we are not planning to sell the mine”.

Production from Ekati is declining, falling 38 percent in the first three quarters of the fiscal year to 2,660,000 carats, and many in the Canadian diamond mining industry are wondering where BHP is heading, especially since earnings from its diamond division only represented 6.8 percent of the group's total income.

However the company is investing in an underground project at the Panda pit, Ekati’s main pit. Once completed, it’s expected to dig out approximately 4.6 million tons of ore and 4.7 million carats of rough diamonds over a six-year production life, yielding 0.98 carats per ton ore (cpt).

During the first nine months of the year, production stood at 1.27 cpt and 1.37 cpt during the previous quarter alone.

“The quality of production in the future is lower than what we are seeing today,” Randolph said. “Lower quality diamonds coming out of ever higher cost mines.”