Ekati output down 29% as it enters twilight years

IDEX News reports BHP Billiton’s Ekati diamond mine produced 481,000 carats in the last quarter of 2011, a 29% drop compared to a year ago, but an increase from September’s 457,000.

BHP owns 80% of the Ekati diamond mine in Canada’s Northwest Territories. The other 20% is owned by geologists Chuck Fipke and Stewart Blusson (each has a 10% stake), who discovered the kimberlite pipes north of Lac de Gras in 1991.

IDEX reports:

Production at Ekati is expected to remain “constrained” in the medium term BHP Billiton reported in a quarterly operations review, as the operations extract lower grade ore.

Ekati accounts for approximately 10% of global rough diamond supply according to IDEX and is located 300 km northeast of Yellowknife and 200 km south of the Arctic Circle.

BHP Billiton (NYSE:BHP) said in November it is reviewing its diamond business for a potential sale of all or parts of the business.

Investment bank Investec said last week that Ekati, in which BHP owns 80%, is worth between $300 million and $500 million because of its limited remaining life and declining earnings. Ekati, which also has silver deposits, could be mined out by 2018.

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Ekati output down 29% as it enters twilight years