Vancouver — In a widely expected move, BHP Billiton (BHP-N) has decided not to renew its agreement allowing De Beers Consolidated Mines the right to market 35% of the diamonds produced at the Ekati mine in the Northwest Territories.
The contract is due to expire at the end of the year.
“BHP Billiton has notified De Beers that it does not intend to renew the agreement,” De Beers said in a statement. “De Beers does not expect the non-renewal of the contract to have a material effect on its business.”
Canada’s first and only diamond mine churned out 4.56 million carats of stones for the fiscal year ended June 30, 2002. This represents a 63% increase over the corresponding period a year ago, during which time Ekati produced 2.8 million carats. The improved production is attributed to higher ore grades and higher recoveries of lower-quality diamonds. The increase in carat production has been driven by the introduction of the mine’s second open-pit operation, the Misery pipe, in December 2001 and the continued optimization of the process plant. Up until December, production had come solely from the Panda kimberlite pipe.
BHP is the operator and 80% owner of Ekati. The remaining 20% is split evenly between geologists Charles Fipke and Stewart Blusson.
Ekati officially opened in October 1998 at a capital cost of $900 million and currently produces nearly 4% of the world’s diamond production by weight and 6% by value.
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