BHP Billiton Q4 Carat Production Drops 30%

Diversified miner and Ekati diamond mine owner BHP Billiton announced in their fourth quarter production results that diamond mining output fell 30 percent. BHP's 80 percent share of the Ekati diamond mine produced 614,000 carats during the quarter, compared to 872,000 carats in the fourth quarter of 2004.

The diamond production decrease in the final quarter of 2005 reflects the processing of lower grade ore at Ekati.

The half year production results from Ekati were also down, from 1,858,000 carats in 2004 to 1,466,000 in 2005, a fall of 21 percent.

As well as a decrease in ore processing, the December 2005 figures also revealed a decrease in the carat yield, both for the quarter and for the half year periods. In the fourth quarter of 2005, 962,000 tons of ore produced 614,000 carats. In the same period in 2004, 1,094,000 tons of ore produced 872,000 carats – a decrease from 0.8 carats per ton, to 0.64 carats per ton.

For the half year period in 2005, 2,120,000 tons of ore were processed, yielding 1,466,000 carats, or 0.7 carats per ton. In 2004 2,278,000 tons of ore produced 1,858 carats or 0.8 carats per ton.

Gold production showed a substantial increase for the half year period, from 61,379 ounces to 108,366 ounces in 2005 – a 77 percent increase.  Fourth quarter gold figures increased 75 percent, from 31,247 in 2004, to 54,700 in 2005. 

The company also reports that copper production for the December 2005 half year was a record 637,300 tones, 24 percent higher than the December 2004 half year. The increase reflects improved performance at Escondida and the inclusion of a full six months of production from the Olympic Dam (Australia).

Silver production was also higher in the December 2005 half year, primarily due to record production at Escondida and the inclusion of six months of production from Olympic Dam and improved mill throughput at Cannington (Australia). Production rose 5 percent from 24,121,000 ounces in 2004 to 25,228,000 ounces in 2005.

2005 saw a sharp rise in the prices of rough diamonds and precious metals. Despite the fall in diamond production, it can be expected that BHP's income from diamonds has risen. Of course, the miner's income from gold and silver can be expected to leap substantially following the record breaking prices for these metals in the past few months.