Re Alliance

Petra Diamonds Ld
16 August 2004


16 August 2004

                             Petra Diamonds Limited

                      Update on Alliance with BHP Billiton


Petra Diamonds Limited ('Petra'), the AIM quoted diamond mining group, announces
that negotiations on the joint venture agreement with BHP Billiton World
Exploration Inc ('BHP Billiton') regarding the Alto Cuilo project in Angola are
at an advanced stage and that, in order to allow for the finalisation of
agreements, the period of its Strategic Alliance ('Alliance') with BHP Billiton
has been extended by three months.

Under the terms of the Alliance dated 20 February 2004, BHP Billiton and Petra
('Parties') entered into a six month period of exclusivity ('Alliance Period')
with respect to BHP Billiton's involvement in the Alto Cuilo diamond project in
north eastern Angola.  During the Alliance Period, the Parties have been
actively negotiating the terms of the joint venture and now the Alliance Period
has been extended by mutual agreement whilst the terms of BHP Billiton's
involvement are finalised; it is anticipated that the details of the formal
joint venture agreement will be announced shortly. As announced in February, BHP
Billiton will also pay US$1.5m to Petra, which will, on the completion of the
formal joint venture agreement, convert into Petra ordinary shares at the share
price on the date of conversion.

Petra, along with its Angolan partners Empresa Nacional de Diamantes de Angola,
EP ('Endiama') and Organizacoes Moyoweno ('Moyoweno'), have meanwhile continued
the exploration work on the diamondiferous kimberlite and alluvial complex on
Alto Cuilo and results are very encouraging.

Kevin Dabinett, CEO of Petra, commented 'We are delighted to be near to
concluding our joint venture with BHP Billiton. Their involvement supports our
view that Angola has the real potential to become one of the world's major
diamond producers.'

 Ends


For further information, please contact:

Kevin Dabinett / David Abery   Justine Howarth / Cathy Malins   Frank H. Moxon
Petra Diamonds                 Parkgreen Communications         Williams de Broe Plc
Tel: [phone]           Tel: [phone]            Tel: [phone]


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