BHP Diamond Revenues -30% Due to Production Decline in FY 2012

(IDEX Online News) – A drop in production at the Ekati mine in Canada led to a decrease in BHP Billiton's revenue and profits. BHP reported a 30 percent decline in revenues from diamonds, to $707 million in the fiscal year ending June 30.

BHP's production declined to 1.8 million carats, 28.8 percent lower than fiscal 2011.

This translates to a 1.7 percent decline in price, to an average of $396.30 per carat.

Underlying earnings before interest and tax (EBIT) fell 58.3 percent to $224 million.

The company said production at Ekati was forecast to remain constrained in the medium term owing to the extraction of lower grade material, consistent with the mine plan.

BHP had little to say about the review of its diamonds business, only stating that it was "ongoing."

Meanwhile, the Ekati Misery Open Pit Project, a pushback of the pit that was mined from 2001 to 2005, is continuing, with a budgeted capital expenditure of $323 million.

Initial production at the pit is slated for 2015.