Petra to Refinance as Sales Slide by a Third

Petra Diamonds has announced plans for a major refinancing program – together with a 33 per cent slide in revenue for FY2025.

The UK-based miner, which has recently sold off two of its four diamond mines, is facing substantial financial and operational challenges.

It is proposing an extension of senior secured bank debt and notes due early next year to 2029 and 2030 respectively, together with a $25m rights issue.

The moves are designed to preserve cash, extend debt repayment timelines, and ensure Petra can continue investing in its two remaining core mines – Cullinan and Finsch, both in South Africa.

Petra’s latest sales results, published on the same day (8 August) as its refinancing package, show some positive momentum in the market with like-for-like rough diamond prices from its latest tender, but revenue for Q4 was down 49 per cent year-on-year to $50m.

Revenue for FY2025 was $206m, down 33 per cent year-on-year from $309m and net debt increased to $264m.

“We would once again like to acknowledge the resilience shown by our employees in navigating a very difficult period for the company and the diamond sector as whole,” the company said in its Q4 and FY 2025 Operating Update.

Meanwhile, in its refinancing proposal Petra said: “Petra has, over the past 18 months, been focused on an internal restructuring that has resulted in a simpler and more streamlined business and operating model.

“This has included the sale of the Koffiefontein and Williamson mines, multiple labour restructuring initiatives and an optimisation and smoothing of the group’s capital development profiles.”

Source: DCLA

Petra Diamonds rethinks sales tactics as market slump drags on

Africa-focused Petra Diamonds has scrapped regular diamond tenders in favour of opportunistic sales as the market for rough stones continues to slump.

The miner reported $53 million in sales from its fifth and sixth tenders of the year, covering production from its two South African mines. Petra will now report sales on a quarterly basis instead of following a fixed tender schedule.

“In response to fluctuations in diamond prices and demand, the company no longer follows regular tender cycles and may postpone portions of tenders or sell goods as run-of-mine,” the company said.

The strategic pivot mirrors De Beers’ reported off-market sales of discounted diamonds to selected clients. The move aimed to reduce inventory without officially slashing prices.

Petra said it sold 613,747 carats in the two tenders, a 29% increase from its fourth tender in February. The average price was $86 per carat, about 4% higher than February’s auction. On a like-for-like basis, prices were down 16% compared to the first six tenders of 2024, largely due to lower-value goods.

Year-to-date, the company has sold 2.39 million carats for $239 million, down from $329 million over the six first tenders of its 2024 financial year.

Petra delayed its April and May tenders due to a weaker product mix at its flagship Cullinan mine. The Finsch mine, meanwhile, saw improved pricing thanks to better ore access. The company expects an improved product mix as it ramps up production from the CC1E and the western side of the C-Cut block.

Petra also drew an additional $33 million in debt, bringing its consolidated net debt to $258 million by the end of March. It attributed this to working capital requirements.

“The continuing challenges in the diamond market and the weaker sales do not bode well given the ongoing negotiations to refinance Petra’s debt obligations,” Raj Ray, an analyst at BMO Capital Markets, wrote on Monday.

Petra has been restructuring to cut costs, including the sale of its stake in Koffiefontein in October and the recent $16 million sale of the Williamson mine in Tanzania.

Petra shares fell almost 3.5% on the news to 19.5 pence each, putting its market cap at about £38 million ($51 million).

Source: DCLA

Petra Diamonds hits all-time low as cash burn continues

Petra Diamonds is to begin discussions with financiers on refinancing a $273m bond that matures in March next year amid scepticism that the company will survive the event.

The ratings agency S&P last week downgraded the company’s credit to CCC on the increased likelihood of default, and maintained a negative outlook.

Shares in the company fell 10% today shortly after the company posted its third quarter results. Petra is now trading at a fresh all-time low and is valued at only £34m on the London Stock Exchange.

While its remaining two assets – the Cullinan and Finsch mines in South Africa – had a solid three months operationally, with a quarter to go, full year guidance has been maintained at 2.4 to 2.7 million carats.

However, the company is still burning cash.

Petra drew on a further $33m as consolidated net debt increased to $258m as of end-March, which the company put down to working capital requirements.

The truth is that the company is desperately in need of improved diamond prices, which have continued to trough this year amid economic uncertainty generated by US President Donald Trump’s on-off tariff regime.

Petra said in April that it had postponed the sale of about 200,000 carats of diamonds from the Cullinan mine near Pretoria because of the “considerable diamond market uncertainty caused by the US tariffs announcement”.

“S&P believes the company faces mounting liquidity challenges amid uncertainty regarding the recovery of the rough diamond market and approaching debt maturities in 2026, with increased likelihood of default – including distressed exchange or debt restructuring – over the next 12 months, if Petra is unable to refinance its debt maturities on time,” said analysts at Berenberg Bank in a note last week.

Commenting on the third quarter results – in which revenue fell to $42m from $106m in the comparative quarter last year (buoyed by sales from a deferred tender) – interim joint CEOs Vivek Gadodia and Juan Kemp, said Petra had experienced “a very difficult diamond market”.

They added: “We believe the steps we have taken over the past 12 months position Petra well for a successful refinancing. We will now look to commence engagements with our lenders on the refinancing of our debt maturing in early 2026.”

Source:miningmx.com

Tanzania’s Williamson Diamonds goes totally Pink

London-listed and South Africa-active Petra Diamonds has sold its entire shareholding in Williamson Diamonds of Tanzania, plus all shareholder loans owed to it, to Pink Diamonds Investments, also of Tanzania.

Pink diamonds are known for their pink hue, ranging from light to deep rose.

The up-to-$16-million transaction has obtained Tanzanian Fair Competition Commission approval for Williamson ownership now vesting entirely with Pink, a Taifa affiliate, which is viewed as possessing the technical and financial capability to conduct operations for the benefit of stakeholders.

With more than three decades of mining-related experience, Taifa’s working relationships extend to mining majors such as De Beers, Barrick and AngloGold Ashanti, and the company is now entering a phase of exclusive ownership of an asset where about 1 100 people are employed, most of them Tanzanian.

The mine’s reserves and resources as of June 30 were reported as 37.17-million carats. With liquidity challenges continuing, further capital investment will be required.

Twenty per cent of any distributable cash generated annually by Williamson will be payable by Pink Diamonds to Petra until the selling price is met, Petra joint interim CEO Vivek Gadodia outlined in a release to Mining Weekly, in which he wished Pink all of the best as its takes over the mine, the kimberlite pipe of which was discovered by Canadian geologist John Williamson in 1940 and which led to ongoing operation since then, making it one of the world’s oldest continuous operating diamond mines. Its yield of 19-million-plus diamond carats includes a 54.5 ct Williamson pink diamond that was presented to British royalty in 1947.

Meanwhile, Petra, with the Cullinan and Finsch underground diamond mines in South Africa, is focusing on value rather than volume at a time when diamond-mining headwinds are tending to dominate the headlines and the usual sale of rough diamonds at acceptable prices is reportedly proving difficult.

This has resulted in the stockpile of rough diamonds held by De Beers, for example, rising to $2-billion, which, according to a report in the Financial Times, is the biggest hold back of rough diamonds since the financial crisis of 2008.

Source: DCLA

Petra Diamonds delays sale amid US tariffs uncertainty

Africa-focused Petra Diamonds has postponed a scheduled sale of about 200,000 carats of diamonds from its Cullinan mine in South Africa, citing uncertainty over the impact of new US tariffs.

Last week, US President Donald Trump announced sweeping import tariffs ranging from 10% to over 100%, including a 30% duty on many South African goods. The move has injected volatility into the global diamond market.

Petra, which holds the world’s third-largest diamond resource, said the decision to delay the Cullinan sale aims to secure stronger market prices once the tariff situation becomes clearer. The sale had been expected to generate approximately $18 million in revenue.

Despite the disruption, the company managed to complete sales from its Finsch mine in South Africa and the Williamson mine in Tanzania before the tariffs were introduced.

South Africa remains one of the largest diamond exporters to the US, alongside India.

So far in the 2025 financial year, Petra has earned $103 million from rough diamond sales, down from $138 million during the first five tenders of the previous year.

Source: mining.com

Duffy resigns as Petra CEO, interim revenue knocked by market weakness

Independent mining group Petra Diamonds, which owns and operates diamond mines in South Africa, has appointed two interim CEOs Vivek Gadodia and Juan Kemp to succeed Richard Duffy, who has resigned by mutual agreement and with immediate effect.

Gadodia will oversee all corporate matters of the group, while Kemp will oversee all operational matters.

At this point, they will not be appointed as directors.

Vivek joined Petra in 2021 with his roles having included planning and corporate planning executive and chief restructuring officer. He previously worked for Sasol in various engineering, project management and corporate positions over a 15-year period.

Kemp, meanwhile, joined Petra in 2009 when the company bought its flagship Cullinan mine from fellow miner De Beers.

Kemp was GM of the mine since 2011 before having been appointed as a chief technical officer in 2019 and operations executive for the Cullinan mine in 2024.

His earlier career included positions at De Beers and AngloGold Ashanti.

The appointments of the interim CEOs come as Petra struggles with lower earnings generation and high debt.

The company’s results for the six months ended December 31, 2024, reflect Petra’s progress in implementing cost reduction plans and smoothed capital profiles, despite weakness in the diamond market.

Petra managed to reduce its mining and processing costs from continuing operations by 19% year-on-year to $98-million.

However, the group’s revenue was also lower by 30% year-on-year, or $49-million, at $115-million owing to additional revenue of $50-million having been carried over from tenders into the prior comparable period.

Adjusted earnings before interest, taxes, depreciation and amortisation amounted to $15-million, which was lower than the $38-million adjusted Ebitda reported in the first half of the prior financial year.

The company’s basic loss a share from continuing operations was $0.30, or $0.13 on an adjusted basis.

Operational free cash inflow of $16-million in the six months under review compares with a $21-million outflow in the first half of the prior year, which Petra says largely reflects the impact of its cost reduction measures, capital smoothing and working capital management.

The lower revenue and earnings over the financial year of 2024, caused Petra to not meet its required leverage and interest cover covenant ratios in its revolving credit facility measured at December 31, 2024.

Petra has since obtained a waiver from the lender, Absa Bank, related to these covenant breaches, and is restarting engagements with lenders regarding the refinancing of its debt.

The group’s consolidated net debt was $215-million as at December 31, compared with $193-million at the end of June, owing to diamond market weakness and the timing of Petra’s tender sales.

Three tender sales took place during the first half of the 2025 financial year (the six months ended December 31), while four have been scheduled for the remainder of the financial year.

Petra realised an average price of $103/ct in the reporting period, which reflects the positive impact of product mix over the period offsetting the overall weaker diamond pricing environment.

OPERATIONS

The group has achieved cost reductions through sustainably lowering overheads and on-mine cost optimisation with limited impact to its operations.

Petra completed the sale of its interest in the Koffiefontein mine to the Stargems Group in the six months under review, which allowed the group to avoid closure-related costs of $23-million.

Petra also entered into an agreement in January to sell its interest in the Williamson mine, in Tanzania, to Pink Diamonds Investments for a headline consideration of $16-million.

The group expects the sale of its interest in the Williamson mine to be completed by the end of the calendar year.

The Finsch mine has transitioned into new production areas called 78-Level Phase 2, with steady operations having been reported over the past few months.

In turn, production from the CC1E zone at the Cullinan mine has also started in the interim period, while Petra continues to advance more extension projects at both of these mines, as well as life-of-mine plan reviews.

Petra intends to re-engage its lenders with a revised business plan and updated cost-savings initiatives, as part of its overall restructuring plan.

The group is targeting net free cashflow generation for the remainder of the financial year, as well as more efforts to make the company resilient to pricing weakness.

Source: DCLA

Revenue Slump as Petra Defers Sales

Petra reported a revenue slump for Q1 2025 after deferring the sale of almost all its South African goods because of persistent weak demand.

The UK-based miner said its only revenue for the quarter ending 30 September was $8.5m for an 18.85-carat blue diamond recovered at Cullinan Mine, South Africa, and $14m for goods from its Williamson mine, in Tanzania.

Total revenue for the quarter, including profit share arrangements, was $23m, down 77 per cent compared to Q1 FY 2024 and 80 per cent compared to Q4 2024.

Petra said its combined tenders 1 and 2, which took place this month, after the end of Q1, brought in $76m.

Average per carat prices were up 13 per cent to $113, compared to the last tender it held, in June. But like-for-like prices were down 9 per cent. Higher prices were due to a better product mix. The company said it had withdrawn 88,000 carats (worth around $3m) of brown goods because of poor demand.

“Our combined first and second tenders indicate continued weakness in the rough diamond market, more than offset by Petra’s product mix,” said CEO Richard Duffy in the Q1 FY 2025 operating update and final sales results for Tenders 1 and 2 FY 2025.

He said Petra was further reviewing cash generation opportunities in the face of ongoing market weakness and a stronger rand.

“We remain committed to our target of net cash generation for the full year in FY 2025,” he said.

“We continue to expect prices to show some improvement in CY 2025, with market fundamentals being supportive in the medium-to-longer term.”

Source: DCLA

Petra Sales Up, Prices Down

Petra Diamonds Operations

Petra Diamonds reported increased sales for FY 2024, despite weak market conditions.

The UK based miner said it had saved $75m by deferring capital expansion programs and sustainably reducing its cost base.

Revenue for the year was $367m, an increase of 13 per cent on FY 2023, according to its Audited Full Year 2024 Results, published on Tuesday (24 September).

“Petra demonstrated its agility in responding to a weaker pricing environment by building greater business resilience,” said CEO Richard Duffy.

“We acknowledge the difficult market conditions through FY 2024 and believe that prices will stabilise through to the end of CY 2024 with some improvement expected in CY 2025.”

Petra sold 3.2m carats of rough during the year an increase of 36 per cent but achieved lower average prices per carat, down 17 per cent to $116, attributable to a 12.4 per cent decline in like for like prices, as well as product mix movements.

Last month Petra today Petra canceled its August/September tender to restrict supply amid ongoing weak demand.

Goods from its Cullinan and Finsch mines, in South Africa, will be sold instead at its next tender, which is expected to close in mid-October.

Source: DCLA

Petra defers another diamond tender amid weak demand

Petra Diamonds has once again postponed the sale of roughs, holding on to the diamonds from its South African operations that would have been offered during the August/September event of the year, amid low demand.

The tender of diamonds from Petra’s Williamson mine in Tanzania will proceed as planned, the company said. It noted that this decision aimed to “support steps taken by major producers to restrict supply during this period of weaker demand.”

Rough diamond parcels from the miner’s South African operations, originally earmarked for sale as part of the first tender of fiscal year 2025, are now planned to be offered in the second tender, expected to close mid-October 2024.

Petra will sell diamonds from its Williamson mine in Tanzania during August/September as planned.

Petra’s South African producing operations include the Cullinan and Finsch mines.

“Our expectation is that supply discipline, together with the expected seasonally stronger demand as we head towards the festive season, will provide some pricing support later in the calendar year,” chief executive Richard Duffy said in the statement.

Petra had differed in June the majority of what would have been its sixth sale for its 2024 fiscal year to the August/September offering, or tender one of fiscal 2025.

The company said recent steps taken to improve its financial position have provided it with the ability to adjust the timing of its tenders based on market conditions.

Source: DCLA

Petra Diamonds focusing on refinancing $250-million loan notes

Having reset its cost base, delivering new life-of-mine (LoM) plans with a smooth capital profile, the focus of Petra Diamonds is very much on refinancing its $250-million loan notes.

“We plan to get that done before the end of this calendar year,” Petra Diamonds CEO Richard Duffy outlined to Mining Weekly in a Zoom interview. (attached Creamer Media video.)

The refinancing of the loan notes will place the London-listed, Africa-active diamond mining company in a position to execute on the growth potential of its long-life assets.

These are Petra’s historic Cullinan diamond mine, located 100 km north-west of Johannesburg, its Finsch diamond mine, which is 160 km north-west of Kimberley, and the Williamson mine, 140 km south-west of Mwanza, in Tanzania.

It will also allow the company to begin to execute on its value-led growth strategy presented by not only its existing asset base, but also through other opportunities.

“We’ll be able to deliver and leverage what we believe will be a much more supported market from next calendar year,” Duffy commented.

The main focus of Petra’s recent investor day was to demonstrate the resilience of the business through steps implemented over the recent months.

The key features were cutting the cost base by $30-million on a sustainable annualised basis.

Through mine replanning, Petra has also smoothed its capital profile going forward basis to around $100-million a year or less.

The main reason is to ensure that the business is cash generative from this financial year (FY) 2025 and to refinance its loan notes, which mature in March 2026.

Mining Weekly: What, specifically, were the LoM updates?

Duffy: In the case of Cullinan mine, we have a board-approved mine plan that goes through to 2033, and the potential through further extensions in the mine itself to be mining beyond 2050. At Finsch mine, we highlighted that the board-approved mine plan sees mining through to 2032 but with the potential to continue mining below the current Block 5 through to 2040. Williamson has an approved mine plan to 2030 with extension opportunities and growth opportunities well into the 2040s. We also provided guidance for the next five years so that we could create some visibility in terms of our production, which we see growing from the current levels of around 2.8-million carats annually to around 3.5-million carats a year by 2028. Most of that growth comes from increasing grade, both at Cullinan and at Finsch.

When you speak of a lower-for-longer diamond market, how does that impact Petra?

What we’re seeing is a diamond market that we expect will continue to remain a little softer through to the end of this calendar year. We took measures towards the end of last year in recognition of what we expected to be a weaker-for-longer market. The steps we took back in October 2023 around deferring some of our capital spend and initiating that cost savings programme meant that we were able to reduce net debt by $11-million from the end of December 2023 to the end of June 2024, the end of our FY 2024. The measures taken ensured that we stopped any cash burn in the business, even in a tougher market. The steps we’ve taken around costs and smooth capital profile mean that we’ll continue to be resilient as a business, and be cash generative from this financial year 2025 onwards. So, we’re well placed to benefit from an improving market, which we expect to see from next calendar year.

What makes you more confident about the market in the medium- to long-term?

What we’ve seen in the market is the culmination of a number of factors that have created some headwinds for us, and that really has been on the back of the higher interest and inflation rates that have been a little more stubborn than expected, the slower return of demand from China, which is an important market for diamonds, and the disruption caused by the rapid growth of lab-grown diamonds. Those were the factors that led to the softer market, which we expect to continue through to the end of December. Why we’re more encouraged in the medium to longer term about what we expect to be a supportive diamond market is around some of the underlying supply-demand fundamentals. If you look at projected supply, or global production of diamonds, all the way through to 2033, the projections are that we’ll see an average 1% decline on an annual basis over that period. When you look at the demand side, there’s projected growth to 2033, of 2% to 4%, so from a fundamental supply-demand perspective, there’s a structural supply deficit. The US buys around 50% of all diamonds, and the projections are that US demand will continue to grow through to 2033. Interestingly, China isn’t projected to grow at the same rate as the US, but India is emerging as a very strong consumer, with 30% growth forecast through to 2033. We see India and its growing middle class as a new, increasingly important market for diamonds that is likely to overtake China.

How are natural diamonds faring against laboratory-grown diamonds?

If you look at lab-grown diamonds, the disruption they caused initially was largely the result of consumers not properly understanding this new lab-grown diamond category. Over the last few years, we’ve seen the price of lab-growns collapse to now sell at a discount of 80% to 90% of a natural diamond. As a result, lab-growns are now firmly established as a different product category in the diamond space. They’re a cheap early entry point and that differentiation will become more discernible and clearer over time. Also, importantly, retailers, jewellers are shifting back to natural simply because the price of lab-grown has collapsed. The margins have collapsed, and it doesn’t make economic sense for them to continue to push lab-growns. We see, in a sense, some reversal of the displacement of lab-grown that we saw previously, in favour of natural diamonds. Another important point is a number of lab-grown producers have stated that they’re moving out of producing gem lab-grown diamonds, and they’re shifting their lab-grown production to industrial applications, around semiconductors, etc. This is led by De Beers’ Lightbox business, where they’ve indicated they’re no longer going to be producing gem lab-grown diamonds, and the same is true of a number of other large lab-grown producers. For all of those reasons, we see inventory levels starting to come down across that value chain going into next year, a shift away from lab-grown back to natural, and the general economics starting to shift in favour of diamonds with the structural supply deficit providing the support.

How do you see traceability unfolding?

We see traceability technology as being part of the differentiation between lab-grown and natural diamonds. What this technology allows us to do, and we’re busy piloting this at the moment, in collaboration with De Beers’ Tracr™ and Sarine Diamond Journey™ technology, is to map all of our half-a-carat gem-quality diamonds, and half-a-carat in the rough and larger. The data around a diamond gets block-chained in a register, and we then trace that diamond through the cutting and polishing. Our clients link the polished diamonds back to the original rough, and that enables traceability all the way through to the retail jeweller – essentially from mine-to-finger. For a consumer who then walks into a jewellery store in New York to buy a one-carat engagement ring, there would be a certificate associated with that, stating that the diamond was recovered from, for example, Cullinan mine in 2020. It would set up the number of employees that the Cullinan mine employs, provide details on all of the social and community projects undertaken by the mine, and include the carbon footprint associated with that polished diamond. So, there’s a whole story around the diamond that reinforces that purchase experience for the consumer, creating an opportunity to grow margin as part of that story, around the mine-to-finger journey.

DIAMOND VERACITY

The traceability that Petra expects to implement during the course of this calendar year will enable it to clearly verify that the diamonds:

are from a Petra mine;
are natural and not lab-grown; and
are not subject to any sanctions.
The application of Tracr™ means that the diamonds from these mines will be subjected to the Internet of Things, AI and blockchain technology to provide comprehensive supply transparency.

In addition, the application of Sarine Diamond Journey™ begins with three-dimensional scanning to establish a verifiable image of the physical diamond and a definitive link to its digital report.

This enables the creation of an unbroken chain of authentication at every stage of the diamond’s journey – from rough to rough, rough to polished, polished to report.

Securely stored in the cloud, this data provides the foundation of end-to-end traceability.

Source: DCLA

Petra Diamonds cuts targets and costs in tough market

Petra Diamonds revised on Thursday its guidance for the next two fiscal years and appointed a new finance leader as part of its plans to lower expenses and debt in a clear sign the diamond market remains in bad shape.

The South African miner had anticipated in December that the sector was beginning to recover. Six months later, Petra has instead cut its production targets. It now expects to produce between 2.8 million and 3.1 million carats in fiscal 2025 and between 2.9 million and 3.3 million in fiscal 2026. This represents a reduction of 18% and 19%, respectively, on the prior target-ranges’ midpoint.

The company also said it expected total carat recovery to be at the lower end of its target range of 2.74 million to 2.78 million for the current fiscal year.

These downgrades, announced in an investor day presentation, coincide with Petra’s plan to reduce operating costs by $30 million annually starting in the fiscal year that ends on June 30, 2025. Total capital spending will be reduced this year to $100 million from the total spent in 2023, which was $117.1 million.

“We have worked hard to deliver an updated business profile in response to ongoing market challenges and to further enhance our resilience to future market and capital cycles,” chief executive Richard Duffy said in a statement.

Petra’s revisions come just a day after the world’s largest diamond producer by value, De Beers, posted disappointing results for its latest sales for the second time this year, and as Anglo American (LON: AAL) plans to sell it off. 

Petra announced it had appointed Johan Snyman to take on the role of chief financial officer starting from October 1. Snyman will replace Jacques Breytenbach, who will leave his position as CFO and director at the end of September due to personal reasons. 

“[Snyman] has played a crucial part in the progress of Petra since joining in January, and I am excited to collaborate with him in his new capacity,” Duffy said.

The new CFO joined Petra this year as financial controller, having worked as vice president for financial reporting at AngloGold Ashanti (NYSE: AU). He has also previously held various financial roles in the mining sector.

Despite the challenging market, Petra remains committed to expanding its Finsch and Cullinan mines in South Africa, it said, and it is projecting production to reach between 3.4 to 3.7 million carats by 2028.

Cullinan is Petra’s flagship mine and the source iconic diamonds, including the famed 3,106-carat Cullinan diamond, which was cut to form the 530-carat Great Star of Africa. They are the two largest diamonds in the British Crown Jewels.

39.34-carat blue diamond at Cullinan mine

Petra’s planned output increase, equivalent to 15% to 17% over three years, will require about $100 million annually. Duffy stated the plans will be financed internally.

Cullinan mine-life can be potentially extended beyond 2048. Finsch, South Africa’s second largest diamond operation by output, could be producing until around 2038.

Shares in Petra experienced high volatility in London after the announcements and were last down 1.96% to 40 pence. This leaves the miner with a total market capitalization of £78.63 million (about $100m).

Source: DCLA

Petra’s Prices Boosted $8.2m Blue

Petra Diamonds sold fewer carats but achieved higher prices earlier this month at its fifth tender of FY 2024, boosted by the sale of an $8.2m blue diamond.

The UK-based miner achieved an average $136 per carat on sales of 362,000 carats for $49m.

Like-for-like figures for its fourth tender, in February, were $112 per carat on sales of 429,000 carats for $48m.

Sales for the year to date are, however, lagging behind FY 2023, at $285m, down 10 per cent down on $316m.

The 14.76ct exceptional color and clarity blue diamond recovered from Cullinan, South Africa, sold for $8.2m, although it was not classified as an “exceptional stone” (over $15m).

Total revenue for Q3 FY 2024 was $66m, down 27 per cent on the previous quarter, due to the lower production and the timing of receipts from the fifth tender.

“Production for the quarter is consistent with the preceding quarter and in-line with expectations.,” said CEO Richard Duffy.

Production guidance for FY 2024 is 2.75m to 2.85m carats.

Earlier this month Petra announced the sale of its loss-making Koffiefontein mine, in South Africa, to Dubai-based Stargems for a nominal sum.

Source: DCLA

Petra Sales Fall Amid Slow Market Recovery

Revenue at Petra Diamonds declined in the first fiscal half as slow demand and India’s two month buying halt affected the miner’s rough sales.

Sales slipped 9% year on year to $187.8 million in the six months that ended December 31, the company said Tuesday. The drop came despite a 27% increase in sales volume to 1.7 million carats, as like for like prices during the period dropped 13% and the miner offered a weaker product mix, it explained.

Group production grew 2% to 1.4 million carats for the first half, partly reflecting the ramp up to full output at the Williamson deposit in Tanzania. Exceptional rough stones those fetching $5 million or more didn’t contribute any revenue during the period, the miner noted.

Petra is on track to meet its production guidance of between 2.9 million and 3.2 million carats for the full fiscal year ending June 30, it said. However, the miner expects output to come in at the lower end of that range.

The company’s net debt rose to $212.3 million as at December 31, compared to $176.8 million on June 30, it noted. The increase is due to the timing of tenders, the continued lower prices for rough, and the need for capital to resume operations at Williamson and extend the life of the Finsch and Cullinan mines in South Africa, Petra added.

Source: DCLA

Petra Believes Rough Prices Have ‘Bottomed’

Petra Diamonds’ rough prices started to bounce back at its latest tender, indicating the market has “likely bottomed,” it said Thursday.

The company’s third trading session brought in $67.9 million from the sale of 519,397 carats, at an average price of $131 per carat. Prices were 19% higher on a like-for-like basis — comparing similar categories of diamonds — than at the fiscal year’s second tender, which ended in October.

Last week, the miner reported early results from the tender of $58.7 million from 462,794 carats, at an average price of $127 per carat. During the remainder of the tender, it sold an additional 56,600 carats for $9.3 million. That comprised 25,200 carats from the Cullinan and Finsch mines in South Africa, which yielded $3.1 million, and 31,400 carats from the Williamson mine in Tanzania, bringing in $6.2 million.

Total rough-diamond revenue for the first fiscal half, which included three tenders, came to $187.8 million, down 7% year on year, the company noted. Like-for-like prices for the six months fell 13% compared to the equivalent three tenders the year before.

Source: DCLA

Midsize Stones Sluggish at Petra Diamond Tender

Petra Diamonds’ rough prices decreased at its first tender of the fiscal year as the anticipated pickup in demand proved disappointing.

The August trading session brought in $79.3 million from the sale of 696,194 carats, with like-for-like prices — those for similar categories of diamonds — falling 4.3% compared with May, the miner reported Friday.

The slowdown was primarily due to flagging prices for rough between 2 and 10.8 carats, which dropped 14% on a like-for-like basis. Prices for diamonds under 2 carats rose 1% to 2%, Petra noted.

While the tender saw strong attendance, “demand was more muted than we had expected in exiting the summer holiday period,” explained Petra CEO Richard Duffy. “The expected seasonal improvement in demand was evident for higher-quality 10.8-carat-plus stones, with solid prices realized. [However,] this was offset by slower demand for 2- to 10-carat size ranges.”

The miner did not sell any exceptional stones during the tender, it reported, though it did garner $1.7 million for a 20.9-carat yellow diamond from its Cullinan deposit.

Overall sales value rose 88% from May’s $42.1 million but slid 23% from the equivalent tender a year earlier, which took place in September 2022. Sales volume was up 49% from May and 34% year on year, while the average price jumped to $114 per carat from the previous tender’s $90.

The August tender did not include any output from the Williamson mine; Petra plans to sell material from that site at its September sale. However, the latest round did feature all the rough Petra had chosen to defer in June, when it postponed its sixth tender due to the sluggish market.

The August sale also contained 75,880 carats of goods that Petra had withdrawn from the May tender due to low bids. Prices for those goods were largely unchanged from May’s offers, but Petra expects demand to rise in the coming months.

“As we enter a seasonally stronger period [that] includes Diwali, Thanksgiving, Christmas and the Chinese New Year, we remain optimistic that jewelry demand will improve and provide some support to prices over the balance of the calendar year,” Duffy said.

Main image: Ore processing at the Williamson mine.

Source: DCLA

Petra’s Sales Slide Amid Large-Stone Scarcity

Petra Diamonds’ sales dropped 44% for the full fiscal year as the miner recovered a lower proportion of high-value stones and pushed off its final tender due to low demand.

Revenue fell to $328.4 million for the 12 months ending June 30, the company reported Tuesday. Sales volume decreased 34% to 2.3 million carats.

The company, which operates the Cullinan, Finsch and Koffiefontein mines in South Africa, as well as the Williamson mine in Tanzania, attributed the decline to a drop in the number of large and exceptional diamonds it sold during the year. The segment contributed only $12.6 million in revenue for the year, compared to $89.1 million in fiscal 2022.

Petra also postponed its sixth and final tender of the financial year as a result of lower rough prices and deferred the sale of 75,900 carats of predominantly higher-value stones from its fifth tender, it explained. A drop in production also hit sales, as the miner had lower availability of rough to offer.

In the fourth fiscal quarter, from April to June, Petra’s rough prices grew 2% on a like-for-like basis versus the same period a year ago, it said. Meanwhile, the miner’s inventories increased to 715,200 carats at the end of the quarter as a result of the deferrals, up from 381,700 on June 30, 2022.

“Our strong balance sheet and flexible sales process enabled us to postpone the majority of our…rough-diamond sales [for the sixth tender] into fiscal year 2024 on the back of what we believe to be a temporary slowdown in demand for rough diamonds,” said Petra CEO Richard Duffy. “We continue to expect a supportive diamond market in the medium to longer terms as a result of the structural supply deficit, which will benefit our strong growth profile.”

Production fell 20% to 2.7 million carats for the fiscal year due to the recovery of lower-grade ore at Cullinan and Finsch. That total was just under the miner’s previous guidance of between 2.75 million and 2.85 million carats for the year.

Petra now expects output for the new fiscal year ending June 2024 to be between 2.9 million and 3.2 million carats, down from the 3 million to 3.3 million carats it previously forecast. It has also lowered its guidance for fiscal 2025 to the 3.4 million and 3.7 million carat range, rather than the 3.6 million to 3.9 million carats it originally estimated. The decrease is the result of a slower-than-expected ramp-up at both Cullinan and Finsch following a delay in work to extend the mines, Petra added.

Source: DCLA

The Industry’s Diamond-Origin Conundrum

The Group of Seven (G7) meeting that took place in Japan in mid-May proved to be an anticlimax for the diamond trade.

The industry had expected a major announcement to come from the meeting relating to required declarations on the origin of diamonds imported to those countries — an additional measure that would help prevent polished diamonds sourced from Russian-origin rough entering their markets.

While a clear guideline did not emerge, the member nations — Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — pledged to work toward such measures.

“In order to reduce the revenues that Russia extracts from the export of diamonds, we will continue to restrict the trade in and use of diamonds mined, processed or produced in Russia,” the group said after the meeting.

As it stands, the US and the UK have implemented bans on diamonds sourced directly from Russia. However, the sanctions don’t account for “substantial transformation,” and consequently the manufacturing center is regarded as the source. For example, diamonds polished in Belgium, India, Israel or the United Arab Emirates (UAE) from Russian rough can technically be imported to the US.

Implementing such detailed declarations is proving more complicated than originally thought. Creating such mechanisms will take time, as Feriel Zerouki, the De Beers executive who heads the World Diamond Council (WDC), said in a recent panel discussion at the JCK Las Vegas show in early June. These measures would apply to the entire industry, seemingly requiring a disclosure of origin for all diamonds at customs.

“How do we support the [sanctions] without paralyzing the industry and making it very cumbersome for natural diamonds to enter the G7 countries,” Zerouki challenged the Las Vegas audience.

Setting standards
It’s a sensitive point for an already heavily audited industry, and for companies in each segment of the supply chain that would bear the added expense of verifying such information.

It’s also worth noting that the G7 cannot enact such requirements as a bloc. It will be left to each country to implement its own import rules. That said, there does at least seem to be an effort among those countries to apply some consistency in their systems. It was an open secret that members of various governments and industry bodies met in Las Vegas during the show to advance these discussions, which presumably covered a wide spectrum of industry-related issues.

Central to the talks must surely be the practicality of such declarations. What mechanisms are available to the industry that would facilitate traceability? And who verifies that these initiatives meet the required standards? And on what are those standards based?

The trade has at its disposal industry structures as well as company programs that tackle the challenge of traceability and source verification — although arguably nothing is foolproof.

See full article here

Tanzania Reports Record $63 Million in Diamond Exports Despite Williamson Mines Closure

 

                  Tanzania Diamond mines

The Bank of Tanzania announced that the country’s diamond exports increased significantly to $63.1 million (USD) in value by November 2022. This is more than seven times of the $8.4 million export value that was recorded in the year-over year analysis since November 2021.

The good performance of the company has been attributed to the country’s diamond producer Williamson Mines which has temporarily shut down operations due to a recent tailings breach on November 7, 2022. The mine is an open pit operation located on the 146-hectare Mwadui kimberlite pipe, which is one of the world’s largest economic kimberlites.

The company belongs to the parent company Petra Diamonds, which owns 75 percent of the company, and the Tanzanian government owns the remainder. According to Petra’s official statement, production at the Williamson mine will resume in the 2024 fiscal year.

Source: DCLA