Frank,
News out today:
Tuesday November 17, 1:36 am Eastern Time
BHP sees Ekati diamond price near target
MELBOURNE, Nov 17 (Reuters) - The Broken Hill Pty Co Ltd said on
Tuesday it expected the average price for the first diamonds from its Ekati
project in the Canadian Arctic to be within five to 10 percent of its target of
US$130 a carat.
BHP Diamonds president Jim Rothwell said the company expected to market all its early production, which was
running at about 100,000 carats a month, but no diamonds had been sold yet.
The company officially opened the mine last month, and expects to produce about three million carats a year for
the first two years.
''The quality and size distribution is as expected from the bulk sample,'' said Rothwell.
''I suspect there is some reduction in the value based on the softness of the market, but I wouldn't expect that to
be any more than five or 10 percent,'' he said, after saying that the company's feasibility work had assumed a price
of $130 a carat.
''The current market for rough diamonds, as with all commodities, is soft,'' said Rothwell.
''Nevertheless, we do not see any difficulties in marketing our production,'' he said.
All of the production will initially be sold through Antwerp.
He said any relationship which BHP might pursue with De Beers Consolidated Mines Ltd's Central Selling
Organisation diamond cartel ''will be for less than 50 percent of production.''
BHP, 51 percent owner of the Ekati project, expects to reach full production of an annual rate of three million carats
by March 1999 from its Panda pit.
Earlier the company had expected to reach annual production of four million carats next year, but it decided to put
off for at least a year mining from the Misery pit until market conditions improve.
The Misery pit has more diamonds per tonne but they are of a lower value than those in the Panda pit.
The other participant in Ekati is Canadian junior miner Dia Met Minerals Ltd (Toronto:DMMb.TO - news).
PHIL |
