Key suitors back out from BHP Billiton’s Ekati diamond mine auction
16 Jun 2012
BHP Billiton, the world's biggest mining company is finding it difficult to sell its Ekati diamond mine in Canada as buyers shy away from buying and investing further in the mine that has a life span of only nine years.
Private equity firm Kohlberg Kravis Roberts (KKR), which had earlier shown interest in buying Ekati, has now backed out from the bidding process, while De Beers, the world's largest diamond miner, which was considering a bid, has pulled out fearing antitrust issues.
De Beers, majority owned by London-based diversified miner Anglo American, had entered the auction process, but yesterday said that it would not bid. The company did not give reasons for backing out, but analysts opine the acquisition of Ekati mine by De Beers would surely raise antitrust concerns.
In November 2011, BHP Billiton had announced that it would review its diamond assets and examine whether its presence in the diamond industry is consistent with its strategy of investing in expandable assets.
The sale is also part of the miner's strategy to exit the diamond mining business, which accounts for around 2.5 per cent of its annual operating profit.
A month later, it sold its entire 51-per cent stake in the Chidliak exploration project in northern Canada to joint venture partner Peregrine Diamonds, for $8.7 million. (See: BHP Billiton to sell Chidliak project to Peregrine Diamonds)
