Thorunn Howatt
Northern News Services

Yellowknife (Feb 27/02) - There could be a lot more jobs in the diamond business thanks to a push from Ekati Mine owner BHP Billiton.

Suzie Bourne takes a good look at Ekati mine's diamond production. - Thorunn Howatt/NNSL photo

"We have been looking into opportunities to expand the business," said BHP Billiton spokesperson Graham Nicholls. "Getting into polished diamonds and selling them to retailers is a natural extension from what we are doing right now." Another natural extension is to market diamonds for third parties as rough diamonds, he said.

BHP Billiton has its own diamond brand called Ekati, like the mine. Ekati diamonds are inscribed with a maple leaf.

"That means to build the BHP Billiton diamonds business beyond just the Ekati Mine rough production."

BHP Billiton wants to market more affordable diamonds.

Right now Ekati brand diamonds are a very high quality but only appeal to a small portion of the market's pocketbook.

The company is also looking at ways to market rough diamonds from other mines.

One method is to develop a branded diamond program that's based on Canadian origin. BHP Billiton will guarantee quality and characteristics to retailers and consumers.

"We are engaged in a program right now for branded diamonds being sold primarily in Canada and we are interested in expanding that program to make it larger and include larger customers in the U.S. and possibly overseas," said Nicholls.

The company still wants to make sure that the profit is there, he added.

Nicholls said BHP Billiton believes it can capitalize on the "Canadian" aspect of the diamonds.

People outside of Canada are interested in Canadian diamonds because of the guarantee of origin.

"There are a certain number of consumers that will be attracted to knowing where the diamonds came from and knowing they came from Canada," said Nicholls.

BHP Billiton is looking even further downstream in the diamond business -- all the way from the mine to the ring. "We don't have any specific plans right now to get into jewelry but it's another example of an area that we might want to investigate further down the road after we've had more experience with handling polished diamonds," said Nicholls.

BHP Billiton is also banking on its own name. It believes customers will put faith in the mining giant -- equating the name with quality and spending more dollars for the name. It could increase the profit margin if people desire diamonds with its name.

"The name brand that you would see wouldn't be BHP Billiton. It would be a name -- a branded, trademark name," said Nicholls.

Profit margins are a bit bigger if there's an effectively branded product.

"Branding is a key part of many different types of consumer sectors so there is an additional opportunity," said Nicholls. But for that, it will have to turn its brand into a household name.

Surprisingly, the question of ethical or "blood" diamonds isn't at the forefront of a bride-to-be's mind when picking out a sparkler.

"Research to date has not indicated that consumers are very aware or concerned about this issue," said Nicholls. "So far it doesn't seem to have really become a major issue or even one of the key issues for diamond purchasers at the retail level."

Consumers are anxious about knowing they are getting a good deal, especially when it comes to larger diamonds. They want to know that they are getting fair value, said Nicholls.

"The branding program that we are talking about is definitely associated with Ekati Mine because of the origin," said Nicholls. But that's not to say the company isn't looking at other types of marketing opportunities. It is looking beyond Ekati and beyond loose stones. "It could also include jewelry as an example," he said.

Consumers are interested in buying diamonds as finished products not as just loose stones, he said.

"We want to look beyond just being Ekati for our diamonds business," said Nicholls.

BHP Billiton, like a lot of other mining and exploration companies, believes that where there are diamonds, there are more diamonds, so the company continues to search other parts of the North for sparkle. "We want to grow a diamonds business for BHP Billiton -- over and above what we have from Ekati as a single asset." said Nicholls.

The company has joined in on the much-publicized "Coronation staking rush" and is diamond hunting much farther North in the High Arctic and in eastern Nunavut.

"We are exploring for other potential new mines," said Nicholls. But the chance of making a big find is a gamble. "There's a lot of money that has to go into exploration before a mine can be found," said Nicholls.