``The Ekati diamond mine, a major development in the North West Territories of Canada, will produce its first diamond in October this year with annual production expected to reach between 3.5 and 4.0 million carats,'' said BHP group general manager for investor relations Graeme McGregor.

In a presentation released on Friday, McGregor said the Ekati mine was among several developments that might eventually become new core businesses for the resources and petroleum group.

The battered Australian blue chip reported a loss of A$1.47 billion for the year ended May 31 after wiping A$3 billion in asset value off its books.

Among the worst hit divisions was the copper division. McGregor told analysts in New York this week that while the group had cut copper production costs to US$0.70 a pound from US$0.90 a pound over the last nine months, thedivision was still vulnerable to a weak market.

``However, the new supply of copper into the current market is expected to continue the downward pressure on prices,'' he said.Every one US cent a pound change in copper prices affects the company's net profit by A$15 million, after taking into account the company's hedging programme.

The company said it had hedged its US$2.25 billion exposure for the next year at an average of US$0.73 to the Australian dollar. After that hedge, every one cent change in the Australian to US dollar exchange rate translated into a A$26 million move in BHP's after tax profit. The Australian dollar is now at US$0.61.

BHP owns the majority of the Escondida copper project in Chile and the Ok Tedi mine in Papua New Guinea. It also owns the former Magma Copper operations in the United States. Oil prices were expected to remain weak, but McGregor said the company's oil production was expected to rise by 2-3 per cent this year.

He said every one dollar a barrel change in world oilprices affected BHP's profits by A$55 million. Exploration and appraisal drilling continues to be encouraging with reserve replacement exceeding production.