Canada diamond mine

Canada-based Harry Winston Diamond Corporation has signed a agreement to acquire the diamond business of Australian mining company BHP Billiton for $500m.

Under the terms, Harry Winston will gain a controlling interest in the Ekati Diamond Mine and associated diamond sorting and sales facilities in Yellowknife, Northwest Territories, Canada, and Antwerp, Belgium.

The firm will pay $400m for the Core Zone interest at the Ekati mine and $100m for the Buffer Zone interest.

BHP currently owns an 80% stake in the Core Zone and a 58.8% stake in the Buffer Zone as part of separate joint venture agreements with the Ekati minority joint venture parties.

The Ekati Diamond Mine generated $75m worth of diamond production in the past five years. Over that period sales from the Core Zone represented approximately 6% of world rough diamond supply by value.

Harry Winston chairman and CEO Robert Gannicott said, "Completion of this acquisition will bring the opportunity to marry our Canadian diamond sorting and marketing skills with an experienced mine operating and development team, a world class operating asset, and future growth potential."

BHP Billiton diamonds and specialty products president Tim Cutt noted, "Harry Winston has long experience in the Canadian diamond industry and their commitment to study further development at EKATI could help extend the mine’s contribution to Northern Canada for many years to come."

Image: BHP Billiton will sell interests in the Ekati Diamond mine. Photo: BHP Billiton.