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RAPAPORT... BHP Billiton and Rio Tinto are mulling a $850 million merger of their respective diamond mining operations in Canada, The Australian reported. The companies, which until recently were embroiled in a general takeover attempt by BHP, have since joined forces. In August, they teamed up to develop the $116 billion iron ore joint venture in the Pilbara.
The Australian wrote that it “understands that BHP Billiton has dispatched employees to Canada to investigate how the two companies could merge their diamond mines, which sit alongside each other.”
While diamonds play a minor role in both companies’ portfolios, Rio Tinto and BHP Billiton are considered the third- and fourth-largest diamond producers behind De Beers and ALROSA.
Rio Tinto owns 60 percent of the Diavik mine in Canada, while BHP has 80 percent of the Ekati mine. The two mines, located northeast of Yellowknife, account for a majority of Canada’s diamond output, with 2008 production at Diavik reaching 5.535 million carats and 3.221 million carats at Ekati.
LH
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