Vancouver With Canada’s Ekati mine in the Northwest Territories marking the only diamond production for global resource conglomerate BHP Billion (BHP-N), the major is looking further a field for new targets.
In an effort to diversify its diamond interest, BHP Billiton is targeting Botswana through a joint venture with privately held Kalahari Diamonds.
BHP Billiton has a 20% stake in the Exploration Company and the World Bank’s equity financing arm, the International Finance Corp., has a 10% interest. The major also has a deal in place to buy back a majority interest in any discovery under an agreed equity-sharing formula.
“There aren’t many (African) countries we won’t consider going into,” says the company’s VP of Diamond Exploration. “We do due diligence, we look at the risks and we want to mitigate those risks".
The democratic nature, as well as the fact that Botswana supplies 31% of the world’s diamonds attracted the interest of BHP.
In Canada, BHP Billiton’s 80%-owned Ekati mine produces about US$400 million worth of rough diamonds a year and in the year to June 2002, it contributed US$180 million in earnings before interest, tax and one-off items to BHP Billiton’s bottom line.
The major also has exploration programs on the go in India and Australia.
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