LONDON — BHP Billiton, billed as the world's largest miner, has sold its diamond business to Harry Winston for $500 million, according to statements from both companies.
BHP said in a statement late Tuesday that it had signed definitive agreements to sell its majority interests in the EKATI Diamond Mine and Diamonds Marketing operations to Harry Winston Diamond Mines Ltd.
EKATI was Canada's first diamond mine, and is located in the Northwest Territories, 200 kilometers south of the Arctic Circle.
“We are very proud of EKATI’s track record and the substantial value it has created for the region and our shareholders," said BHP Billiton diamonds and specialty products president Tim Cutt. "Harry Winston has long experience in the Canadian diamond industry and their commitment to study further development at EKATI could help extend the mine’s contribution to Northern Canada for many years to come.”
The chairman and chief executive of Harry Winston Diamond Corporation, Robert A. Gannicott, said in a separate statement on Tuesday: "Completion of this acquisition will bring the opportunity to marry our Canadian diamond sorting and marketing skills with an experienced mine operating and development team, a world class operating asset, and future growth potential.
"Together with our existing mining business, these assets will serve as our platform for sustained, disciplined growth in the upstream diamond sector," he added.
The deal is expected to close in the first quarter of calendar year 2013.
Harry Winston operates two segments; mining and branded retail. Last month, Harry Winston denied press speculation that it was looking to sell its watch and jewelry division for $1 billion.
Harry Winston Diamond Corporation has been involved in the Canadian diamond industry since 1994, when the Diavik Diamond Mine was discovered. The Harry Winston statement said the company is "enthusiastic" about the opportunity to expand and strengthen its mining division.
Winston said it was looking to extend EKATI's mine life and to building "long-lasting and sustainable opportunities and benefits for the people of the Northwest Territories."
Under the terms of the agreement, Harry Winston will assume all of BHP Billiton’s obligations under EKATI’s environmental and socio-economic agreements with Canadian and local authorities.
All BHP Billiton employees working at EKATI, in Yellowknife, Canada and in Diamonds Marketing in Antwerp will become employees of Harry Winston as part of the transaction.
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