BHP ‘Inching Closer’ to Leaving Diamond Industry, Kloppers Says
“Once you decide to exit a specific sector you’re probably not going to enter that for a couple of decades,” Kloppers said today on a conference call. “We’ve made that choice in titanium and we’re inching closer to that choice in diamonds.”
BHP announced Nov. 29 that it’s studying the sale of some or all of its diamond unit, saying the operations may no longer fit with its strategy. The Melbourne-based company, which accounted for about 7.5 percent of global diamond production by value in 2010, owns 80 percent of the Ekati mine in Canada’s Northwest Territories.
The Ekati deposit, valued at $300 million to $500 million by Investec Securities Ltd., will probably be run until closure if no buyer is found, Kloppers said.
“As we invest more in our bigger assets, the minimum threshold for both an industry and an asset in terms of scale gets moved up,” he said. “We then make choices on industries.”
BHP agreed last week to sell its stake in Richards Bay Minerals to Rio Tinto Group, exiting the titanium minerals industry. The company is spending $80 billion in the next five years to boost output of iron ore, copper and coal.
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