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Nicholas Grove is a Morningstar journalist.

BHP Billiton (BHP) on Wednesday said it is reviewing its diamonds business, comprising stakes in the EKATI diamond mine and the Chidliak exploration project in Canada.

BHP said its strategy is to invest in large, long-life, upstream and expandable assets, and while EKATI is a world-class operation and Chidliak is a promising exploration opportunity, there are few options to develop new diamond mines that are consistent with this approach.

"This review will, therefore, examine whether a continued presence in the diamonds industry is consistent with BHP Billiton's strategy and evaluate the potential sale of all or part of the diamonds business," the world's biggest miner said in a statement.

Potential transactions arising from the review will be subject to detailed analysis before a final decision is made, the company said. In the event these criteria are not met, BHP said it will continue to operate its world-class diamonds business in a sustainable manner.

BHP said the review of its diamonds portfolio is expected to be completed by the end of January 2012.

EKATI has produced an average of over 3 million carats of rough diamonds per year over the last three years, with annual sales representing approximately 10 per cent of global diamond supply by value.

Chidliak is a joint venture partnership between BHP and Peregrine Diamonds and has been operated by Peregrine since 2006.

Commenting on the review, Morningstar global head of basic materials Mark Taylor said BHP's diamonds business was hardly worthy of being called a "division".

"It's miniscule in the grand scheme of things," Taylor said.

In the same sector, media reports on Wednesday said BHP rival Rio Tinto's (RIO) friendly takeover of Canadian junior uranium miner Hathor Resources appeared to have succeeded, with rival bidder Cameco bowing out.

Media reports also quoted Deutsche Bank as saying that Rio looks set to take a $5 billion one-time charge at its full-year results to further write down the value of its aluminium assets.

"They'll take their medicine there," Taylor said of the write-down.