From Rapaport News:
As the smallest units in each of BHP Billiton and Rio Tinto’s businesses, the diamond operations are unlikely to play a major role in the proposed merger between the two Australian mining giants.
Nevertheless, the pooled diamond operations would cement it as the third largest diamond producer in the world behind No.1 De Beers and No.2 ALROSA.
BHP and Rio Tinto together produced 31.5 million carats of diamonds in the 12 months ending September 30, 2007, with the bulk, 27.77 million carats worth, coming from Rio Tinto’s operations. Speculation has been rife that Rio was seeking to sell off its diamond unit after production dropped by 29 percent in the first nine months of 2007.
Rio has its flagship Argyle mine in Australia, a 60 percent stake in the Diavik operations in Canada, and a 78 percent share in Zimbabwe’s Murowa mine. BHP would bring its 80 percent share in the Ekati diamond mine in Canada to the table, plus exploration projects in Canada, Angola, and the Democratic Republic of the Congo.
BHP said in a report outlining BHP’s rejected takeover bid for Rio, that diamonds would contribute 4 percent of the merged company’s EBITDA (earnings before interest, tax, depreciation and amortization.) ...MORE
