BHP considers sale of Canada’s Ekati and Chidliak

by eyetee | December 5, 2011 1:48 pm

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Majority stakes in Canada’s Ekati diamond mine and Chidliak project may soon be up for sale.

Mining giant BHP Billiton says it is reviewing its continued presence in the diamond industry and whether it is consistent with its corporate strategy of investing in “large, long life, upstream and expandable assets while remaining a simple and scalable organization.”

The company says several years of exploration indicate there are few options when it comes to developing new mines that will meet its long-term corporate goals; it is currently reviewing the possibility of selling part or all of its diamond business. BHP owns 80 per cent of the Ekati mine and 51 per cent of Chidliak.

“Ekati has made a substantial contribution to economic growth and development in the north ever since diamonds were first discovered there in 1991,” said Tim Cutt, president of BHP Billiton diamonds and specialty products. “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 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.”

Mel Moss, president of Regal Imports and a dealer of BHP’s CanadaMark program, believes selling Ekati should have no impact here in Canada.

“My initial feeling is nothing will change,” Moss tells Jewellery Business. “I’m looking at this as not a major concern to the Canadian diamond industry. I see it as a progression.”

Rumours have been swirling for months that Russia’s Alrosa was interested in buying BHP’s stake in Ekati. However, Moss thinks Rio Tinto—which owns the nearby Diavik mine—would likely put in an offer.

BHP said it would only pursue options that would preserve Ekati’s safety and environmental standards and protect the benefits of the communities around it.

The mine has produced more than three million carats per year for the last three years. Its annual sales represent about 10 per cent of the global diamond supply by value.

BHP’s review is expected to be completed by the end of next month.

Source URL: https://www.jewellerybusiness.com/news/bhp-considers-sale-of-canadas-ekati-and-chidliak/

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