Harry Winston Diamond Corp. (HW.TO, HWD) and groups led by KKR (
) & Co. and Apollo Global Management LLC are in talks to buy
BHP Billiton Ltd.'s Ekati diamond mine in Canada, said two people
with knowledge of the matter, according to a Bloomberg report.
The sale may fetch $500 million to $750 million and an agreement
could be struck in about a month, said the people, who declined to
be identified as the process is private, according to Bloomberg.
Apollo has teamed up with former Stornoway Diamond Corp. (
) Chairman Eira Thomas to pursue Ekati, the people said.
BHP, the world's biggest mining company, said Nov. 30 it may
sell some or all of its diamond operations, Bloomberg noted. Ekati,
in Canada's Northwest Territories, produces about 11% of the
world's diamonds by value and about 3% by weight, according to the
company's website. The mine is valued at $300 million to $500
million, Tim Gerrard, a Sydney-based analyst at Investec Securities
Ltd., said Jan. 6.
Canada's Harry Winston has a 40% stake in the nearby Diavik mine
and Rio Tinto Group owns the rest. Harry Winston Chief Executive
Officer Bob Gannicott said on a Dec. 9 conference call that BHP's
Ekati mine is "of some interest", adding that the asset "is close
to the end of its existing life."
KKR and Apollo, both based in New York, have made investments in
natural resources in recent months. A group led by KKR last year
paid $7.2 billion for Oklahoma-based oil company Samson Investment
Co. while Apollo agreed last month to acquire El Paso Corp. (
)'s oil- and gas-exploration unit for $7.15 billion.