BHP Billiton reported that revenue from its diamond operations fell 30 percent during the fiscal year that ended on June 30, 2012. Earnings before interest and tax (EBIT) declined 58 percent to $224 million, Rapaport reports.
BHP Billiton explained that production at its 80 percent owned Ekati mine in Canada was the main contributing factor to the compression of operating margins, while diamond prices were stronger than the previous year.
The company’s diamond production fell 29 percent to 1.784 million carats during the fiscal year. BHP Billiton stated that production at Ekati is expected to remain constrained as the operations extract lower grade material, consistent with the mine plan.
BHP Billiton did not provide separate data for the second half of its fiscal year, however, Rapaport calculations indicated that the decline in diamond revenue accelerated in the second half. For the six months that ended on June 30, BHP Billiton’s diamond revenue fell 40 percent year on year to $350 million while EBIT dropped 69 percent to $104 million.
BHP Billiton stated that its review of the diamond business, announced in December 2011, is ongoing.
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