Rising Prices, Less Exploration, Push Up BHPD Diamond Earnings

Aerial view of BHP Billiton's Ekati mine

A sharp rise in rough diamond prices in the first half of the fiscal year pushed up BHP Billiton’s revenues from its diamonds and specialty products segment by 23.9 percent to $566 million, the company reported Wednesday. Pre-tax earnings leaped 115.2 percent to $170 million in the six month period.

The jump was mainly due to higher rough diamond prices and cost efficiencies at the Ekati diamond mine, where the miner holds an 80 percent stake. Reduced diamonds exploration activities added $19 million to the segments bottom line.

With revenues of $439 million in the January-June 2009 period, and EBIT of $66 million in the period, 2009 revenues totaled $1,005 million and EBIT $236 million

In addition to diamonds, the Diamonds and Specialty Products segment includes mining of titanium minerals as well as potash development. Potash exploration expenses of $48 million were unchanged and higher earnings were partially offset by a reduction in operating earnings in Titanium Minerals due to lower prices and higher energy costs.

Revenues for the BHP Billiton Group totaled $24.58 billion, falling 17.5 percent compared to the July-December period of 2008. Profit from operations rose to $9.12 billion, a 26.2 percent year-over-year increase.