BHP Billiton approves $250-million US Ekati mine expansion

BHP Billiton has given the go-ahead to a major underground expansion at its Ekati diamond mine in the Northwest Territories.

Development of the Koala underground project is expected to cost $250 million US. BHP Billiton's 80 per cent stake in the Ekati mine puts its share of the investment at $200 million US.

First production is slated for late 2007 and full production will start by mid-2009, the company said. The Koala underground expansion is aimed atrecovering 9.8 million carats of "high value Koala diamonds" over an estimated production life of 11 years.

The Ekati mine's Panda Underground Project has already began production. The company estimates it will produce 4.7 million carats oversix years.

"The development of the Koala underground project follows the successful completion of the Panda underground mine at Ekati, earlier this year," BHP Billiton executive Alberto Calderon said in a statement.

"This development will also partially offset the natural decline in production grades and quality that occurs as the mine matures," he said.

News of the expansion comes one day after unionized mine workersbegan votingon a tentative deal to end a strike that began almost three months ago.

About 375 workers at the mine were seeking a first contract. The vote results should be known on Friday.

Ekati, located 300 kilometres northeast of Yellowknife,is Canada's first diamond mine.It opened in 1998. It consists of five open pit and three underground operations.