June 3, 1999
Ekati Update Kicks Off Vegas Seminars
LAS VEGAS - With its diamonds already fetching some of the highest prices per carat on the world market, the Ekati Mine in Canada's Northwest Territories is expected to eventually produce about 6% of overall world diamond value. The diamonds are being sold for about $144 per carat, reported Graham Nichols of BHP Diamonds, the mine's operator and co-owner, during a presentation at the conference program of the JCK Show here yesterday.
Nichols said the Ekati yield of gem-quality diamonds are mostly clear white, classic octahedral-shaped stones in sizes from 11 points to 4 carats. A 69-ct. diamond was recently discovered at the site, beating an earlier record for the mine.
Development at other diamond mines in the Northwest Territories, including claims by Diavik, De Beers/Monopros and several other companies, is increasingly busy, he said. Nichols predicted in five years about 15% of the world's diamonds will be produced in Canada.
BHP and De Beers are working out final details of their marketing agreement for 35% of the Ekati production. De Beers' Central Selling Organisation should have its first diamonds in a few months. Nichols said BHP was hesitant to sell more than 50% of its production to De Beers because it wanted to avoid problems with antitrust laws in Canada, the U.S. and Australia.
The company sells the other 65% of Ekati production through its office in Antwerp, Belgium, mostly to "core customers," similar to De Beers' sightholders, who get regular, predictable supplies about every five weeks. BHP also conducts "window" sales of highly sorted stones to smaller customers to analyze and keep track of conditions on the open market. The company has no plans to institute quotas, restrict production or build up stockpiles, Nichols said, because it feels the market has little need for such protection.
Nichols said BHP is watching De Beers' branding initiatives with interest, but has no current plans to brand its production. Tracking the diamonds after they leave the mine also concerns the company. Diamond manufacturers who have branded their Ekati stones as "Canadian" have had success with consumers, especially in Canada, Nichols said.
- by Peggy Jo Donahue