Giant Australian miner BHP Billiton (ASX: BHP) plans to leave the diamond mining business and instead focus on long-life and expandable assets. The company said it is considering selling its diamond interests in Canada's Ekati mine and Chidliak exploration venture.

Billiton explained its decision to too much downstream activities involved in the diamond business such as the need to cut, polish and market the precious stone. The firm said there are few options to develop new diamond mines versus more prospects in the upstream mining business.

"Ekati is a world-class operation and Chidliak is a promising exploration opportunity, but many years of extensive exploration suggest there are few options to develop new diamond mines that are consistent with this approach," Billiton said in a statement.

The Ekati mine is BHP and Canada's first diamond mine, located 310 kilometres north-east of Yellowknife. It accounts for 10 per cent of global supply of diamonds based on value. BHP has an 80 per cent stake in the venture, while the remaining 20 per cent is held by geologists who originally discovered the mine in the 1990s.

Chidliak is 51 per cent owned by Billiton and 49 per cent held by Peregrine Diamonds. Located on South East Baffin Island in Nunavut, Chidliak has potential for platinum/palladium, lead-zinc and copper deposits, besides diamond.

"Ekati is a pretty mature mine and it's best days are probably behind it, so they're probably looking at selling this when it still has some life left and they can get some money for it," BMO Capital Markets analyst Edward Sterck told Bloomberg.

Mr Sterck identified Russian diamond-mining firm OAO Alrosa, Rio Tinto and Harry Winston Diamond Corporation which owns the nearby Diavik diamond mine as the potential buyers of BHP's stake in Ekati. BMO valued BHP's stake at $2.7 billion based on a 10 per cent discount rate.

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