TORONTO (AFX) - Anglo-Australian mining giant BHP Billiton has approved a major expansion of its Ekati diamond mine in the Far North just a few days after the company reached agreement on a first contract covering 375 workers at Canada's first diamond project.
BHP Billiton announced Wednesday that the Koala underground project at the Ekati mine, projected to cost US$250 million, had received approval.
BHP Billiton's share of the expansion is about US$200 million.
Initial production from the development in the Northwest Territories is expected to begin in the fourth quarter of 2007 and full production is expected to be reached in the middle of 2009, BHP Billiton said.
The project is slated to recover about 9.8 million carats of high value Koala diamonds over an 11-year production life.
BHP Billiton, the world's biggest mining company, has an 80 percent interest in Ekati, a group of mines in the Northwest Territories.
The mine, located about 185 miles northeast of Yellowknife and 125 miles south of the Arctic Circle, is BHP Billiton's only diamond operation and accounts for about 4 percent of the world's diamond output by weight and 6 percent by value, according to the company's Web site.
The planned expansion was announced a few days after BHP Billiton struck a tentative agreement on a contract covering 375 workers at the mine who had been on strike since April 7.
BHP employs about 37,000 people in 25 countries, producing everything from copper and aluminum to coal, uranium, silver and oil and gas.
American depositary shares of the company added 5 cents to close at $40.06 on the New York Stock Exchange.
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