De Beers won't bid for BHP's stake in Ekati: sources

Fri Jun 15, 2012 6:10pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Clara Ferreira-Marques and Euan Rocha

LONDON/TORONTO (Reuters) - De Beers, the world's largest diamond miner, considered a bid for BHP Billiton's (BLT.L: Quote) 80 percent stake in the EKATI diamond mine, but it has decided not to submit an offer for the asset, according to multiple sources involved in the process.

De Beers, soon to be majority owned by miner Anglo American (AAL.L: Quote), entered the auction process late and examined the possibility of an offer, which would have been its first acquisition under its new chief executive and one of its largest. EKATI would also have been only the group's second deal in Canada, more than a decade after the diamond producer took control of Snap Lake - its first mine outside Africa.

But De Beers confirmed on Friday it would not submit an offer, in a further sign of cooling interest in the auction process for the BHP mine in Canada's northern reaches. A spokesman for De Beers declined to comment further.

BHP Billiton, the world's largest miner, said last year it planned to sell all or part of its diamond assets, including the EKATI mine, as it focused on larger, long-life assets.

In December, BHP agreed to sell its majority stake in the Chidliak exploration project in northern Canada to its partner Peregrine Diamonds (PGD.TO: Quote).

At the time, BHP said it was still reviewing its interest in EKATI, the cornerstone of its diamond business, and would retain its stake if a suitable buyer was not found. BHP was expected to make an announcement on the sale, or its decision to keep EKATI, by mid year, but that could be extended.

BHP declined to comment on the auction process.

Sources confirmed that the sale process was continuing, however, with final bids for the asset due by close of business on Friday, though the level interest remained unclear.   Continued...