U.S. private equity firm KKR is working on a deal to buy and merge the diamond mining units of BHP Billiton and Rio Tinto, according to Britain’s Sunday Times. The publication added that KKR is said to be leading the bidding for BHP's Ekati diamond mine in Canada for around $750 million.
Reuters reported last month that KKR was one of the few remaining parties working on a possible bid for BHP Billiton's Canadian EKATI diamonds mine, after other bidders including Apollo and Gem Diamonds pulled out.
The combined businesses would control around 15% of world diamond supply, the Sunday Times asserts. It would also create the world's third-largest diamond producer behind De Beers and Russia’s Alrosa.
Canadian companies Harry Winston (TSX: T.HW, Stock Forum) and Stornoway (TSX: T.SWY, Stock Forum) were also thought to be interested Ekati as well as Rio's Diavik mine, although the price tags may be too rich for either company. Harry Winston has a 40% stake in the Diavik mine in the Northwest Territories, partnering with Rio Tinto.