BHP Diamond Revenues Rise, Yet Bottom Line Hurt by Lower Value

Mining giant BHP Billiton announced Wednesday that underlying EBITDA (earnings before interest, taxes, depreciation and amortization) for the half-year ended December 31 rose 6.4 percent to $11.2 billion, but that it suffered a 7.7 percent decrease in its diamonds and specialty products sector group, which fell to $72 million.

Diamond revenues during the six-month period were $418 million, growing 6.4 percent year-over-year.

Earnings in the diamonds and specialty products segment, which includes diamonds and titanium minerals, was mainly due to increased exploration activity on diamond targets in Angola, lower value per carat diamonds and unfavorable exchange rate movements for the Canadian dollar and South African rand against the U.S. dollar, the miner said.

This was partly offset by higher diamond sales volumes and lower unit costs at Ekati due to the processing of higher grade material, moving to underground mining areas and increased cost efficiencies.

BHP recently completed the Koala Underground project in Canada under budget, spending $176 million instead of the planned $200 million. BHP holds an 80 percent stake in Koala, which has an ore processing capacity of 3,300 tons per day.