Report: BHP Billiton, Rio Tinto Considering Canada Diamond Merger

The winter road allows some access to the remote Canadian diamond mines

BHP Billiton and Rio Tinto are checking an option to merge their Canadian diamond operations, according to a report published Monday. BHP Billiton owns 80 percent of Ekati and Rio Tinto holds a 60 percent stake in Diavik. Both operate the mines, located in Canada’s Northwest Territories.

According to The Australian, BHP Billiton has sent a team to Canada to investigate how the two mining giants could merge their diamond mines.

With operational costs remaining high while demand and prices of rough diamonds not yet back to last year’s levels, a merger makes sense. After BHP Billiton failed to takeover Rio Tinto last year, the two companies found away to cooperate in light of external threats.

The two declined to confirm to the newspaper that if they were in talks about a diamond merger. The companies reiterated that they were focused on finalizing the iron ore joint venture.