The Australian mining giant,
BHP Billiton Ltd.
) recently completed the divestiture of its interests in EKATI
Diamond Mine and Diamonds Marketing operations to
Dominion Diamond Corporation
). The sale, announced on Nov 13, 2012, is valued at US$553.0
Dominion, previously known as Harry Winston Diamond
Corporation, will assume all the obligations related to the mine
with the Government of Canada and Government of the Northwest
Territories. Also, Dominion will continue to work with the
businesses in Canadian North.
All the employees of EKATI mine will continue working as
employees of Dominion. EKATI, being Canada's first diamond mine,
has a successful track record.
BHP Billiton's interests in EKATI mine comprise two joint
ventures, which are now sold to Dominion. BHP Billiton holds
80.0% interest in Core Zone Joint Venture, which consists of the
existing operations and 58.8% interest in Buffer Zone Joint
Venture, which focuses on the exploration targets.
Recently, BHP Billiton has been focusing on streamlining its
operations by cutting down investments in assets apart from its
core businesses. This divestiture fits in well with the strategy
ahead of the divestiture of interests in Richards Bay Minerals
and Yeelirrie in 2012.
BHP Billiton has recorded $211.0 million as post-tax
impairment charge of the assets related to the diamond business,
in the half year ended December 2012. In these fiscal 2013 first
half results announced on Feb 20, reported earnings before taxes
experienced a major blow from lower volumes of diamond
With the divestiture of the diamond business, we expect BHP
Billiton to focus on its core competencies and grow in the coming
quarters. BHP Billion currently has a Zacks Rank #3 (Hold). Other
mining stocks worth a look are
US Energy Corp.
); both carrying a Zacks Rank #2 (Buy).
BHP BILLITN LTD (BHP): Free Stock Analysis
DOMINION DIAMND (DDC): Free Stock Analysis
UR-ENERGY INC (URG): Free Stock Analysis
US ENERGY CP-WY (USEG): Free Stock Analysis
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