BHP Billiton to Review Diamonds Business, Sale of Ekati an Option

The Ekati mine may be sold following a review

(IDEX Online News) – BHP Billiton is reviewing its diamonds business – its 80 percent stake in the Ekati diamond mine and the Chidliak exploration project, the miner said on Tuesday. The announcement follows a period of speculation that the company is about to announce the sale of Ekati.

This review will examine whether a continued presence in the diamonds industry is consistent with BHP Billiton’s strategy and evaluate the potential sale of all or part of the diamonds business, the company said.

In recent weeks there has been speculation in the market that Ekati is about to be sold to a large miner, possibly one already in the diamond industry. The firm did not wish to respond directly on this, only saying that the review, expected to be completed by the end of January 2012, will consider the possibility of selling one or both assets.

Currently Ekati is source of about 10 percent of the global diamond supply by value.

The miner said its strategy is to invest in large, long life, upstream and expandable assets while remaining a simple and scalable organization.

"Ekati is a world class operation and Chidliak is a promising exploration opportunity, but many years of extensive exploration suggest there are few options to develop new diamond mines that are consistent with this approach," it added.

BHP Billiton stated it would only pursue those options that will preserve Ekati’s outstanding safety and environmental standards and protect the benefits that the mine has created for local communities.

"Potential transactions arising from the review will be subject to detailed analysis before a final decision is made. In the event that these criteria are not met, BHP Billiton will continue to operate its world class diamonds business in a sustainable manner."

BHP Billiton Diamonds & Specialty Products President Tim Cutt said, “Ekati has made a substantial contribution to economic growth and development in the North ever since diamonds were first discovered there in 1991. Its success is a credit to the great team working at the mine and the strong partnerships they have built with Aboriginal communities and local businesses.

“The review we’ve announced today will seek to maintain this legacy so that Ekati continues to bring social and economic benefits to the North while remaining a great place to work.”