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

Rio Tinto Output Dwindles as Mine Depletes

Rio Tinto’s diamond production fell in 2023 following the closure of portions of its Diavik mine in Canada earlier in the year.

Total production dropped 28% to 3.3 million carats for the full year, the company said Tuesday. Rio Tinto completed mining at Diavik’s A418 underground area and at its A21 open-pit kimberlite pipes, it explained. Improvements in the volume of ore produced at the A154N underground partially offset the loss in output from those portions.

In the fourth quarter, output slipped 50% year on year to 659,000 carats, and was down 13% from the previous quarter.

Diavik is Rio Tinto’s sole diamond mine following the closure of Australia’s Argyle deposit in November 2020. The miner’s share of Diavik increased from 60% to 100% in November 2021, when it assumed control of the asset following the inability of its joint-venture partner, Dominion Diamond Mines, to pay its share of upkeep. In November, Rio Tinto also sold its 75% share of the Fort à la Corne diamond exploration project in Saskatchewan to joint-venture partner Star Diamond Corporation, in an effort to focus on metals and minerals.

Rio Tinto will spend $40 million to move into underground mining at the A21 portion of Diavik, which it believes could add more than 2 million carats of rough production, it reported in February 2023. That expansion is due to keep the mine in operation until the first quarter of 2026.

Meanwhile, the company did not provide rough-production guidance for 2024.

Source: DCLA

India to Lead Demand for Natural Diamonds

India will lead demand for natural diamonds in 2024, says David Kellie, CEO of Natural Diamond Council (NDC), as US buyers increasingly switch to lab grown.

“The Indian market remains the strongest growth market in the world because of its strong financial position and changing demographics,” he told The Economic Times, in India.

“Indian women are now financially stronger, and they are driving the demand. The key economic indicators in the US are not yet favourable for a demand recovery in diamond purchase.”

Kellie (pictured) predicts a polarization between the natural and lab grown markets, with a price difference currently at 80 per cent to 90 per cent.

Natural diamonds will become increasingly rare, he said, with no new mines in prospect, and with miners digging deeper, and spending more, to reach remaining deposits.

Source: DCLA

De Beers Cuts Rough Prices by Average of 10% to 15%

De Beers reduced rough-diamond prices by an average of 10% to 15% at this week’s sight, aiming to stimulate sales and bring its rates more in line with the rest of the market, sources told Rapaport News.

The miner lowered prices by 5% to 10% for rough under 0.75 carats, with thinner or no reductions for the smallest items that produce melee, sightholders and other market insiders said Monday on condition of anonymity.

Rough weighing 0.75 to 2 carats saw reductions of approximately 10% to 15% on average, while prices of 2-carat and larger goods dropped about 15%, the sources added.

Select makeables — the 2- to 4-carat rough stones that produce SI2 to I2 diamonds — fell more sharply, with estimates ranging from 20% to 25%. This reflects the impact of lab-grown competition on mid-market US demand in the past year, sightholders explained. De Beers does not comment on pricing.

De Beers tends to sell less volume during a downturn and reduce prices only once the polished market has improved. The RapNet Diamond Index (RAPI™) for 1-carat diamonds slid 21% in 2023, the worst year on record for the category, but sightholders reported a moderate uptick in US demand since the holiday shopping season began, though Chinese orders remain weak.

The global market also stabilized as a result of India’s two-month voluntary freeze on rough imports, which ended December 15.

“[In the past, De Beers] didn’t want to change prices because they didn’t know [what the state of the] polished [market] was,” one of the sources commented. “They have an idea where polished is now, and have adjusted rough to polished.”

However, several sightholders said the drops did not go far enough, with De Beers’ prices still above those of outside tenders and auctions and also too high for many manufacturers to make a profit.

Even with the price reduction, the sources expected demand at the sight to be limited, with sales of around $300 million. The trading session, De Beers’ first of the year, began Monday and runs through Friday in Gaborone, Botswana.

Source: DCLA

De Beers approves $1 billion spending at Botswana mine

Global diamond giant De Beers said it will go ahead with a planned $1 billion investment to extend the life of its flagship Jwaneng mine in Botswana, even as last year’s downturn in gem demand persists.

The Anglo American (AAL.L) unit and the Botswana government, which jointly own Debswana Diamond Company, have approved the spending that will convert the Jwaneng pit into an underground operation.

Debswana said in 2018 it planned an investment to extend the lifespan of the mine by 11 years from 2024. De Beers said the spending is necessary as long-term supply of rough gems is expected to tighten.

Angola last year started mining at its new Luele project, the biggest in the country and one of the world’s largest by estimated resources, despite depressed diamond demand.

“The global supply of natural diamonds is falling, so moving forward with the Jwaneng underground project creates new value for investors,” De Beers CEO Al Cook said.

Demand for rough diamonds has been weak in recent months with India – cutter and polisher of 90% of the world’s rough diamonds – asking global miners to stop selling it gemstones to manage accumulated stocks.

“This investment is aligned with our strategy to prioritise investments in the highest quality projects,” Cook said.

De Beers last year agreed a new diamond sales pact, which will see the government’s share of diamonds from the Debswana joint venture gradually increase to 50% over the next decade.

Source: DCLA

Gem Diamonds and Lucara find first big stones of 2024

Africa-focused miners Gem Diamonds and Lucara Diamond have recovered big, high-quality Type IIa diamonds at their respective operations.

Gem Diamonds said on Thursday it had unearthed a 295-carat rough stone at its Letšeng mine in Lesotho, adding to a long list of diamonds over 100 carats found at the operation over the past two years.

The prolific mine is one of the world’s ten largest diamond operations by revenue. At 3,100 metres (10,000 feet) above sea level, Letšeng is also one of the world’s most elevated diamond mines.

Canada’s Lucara recovered a 166-carat rough in the Coarse X-Ray Transmission unit at its Karowe diamond mine in Botswana. The company said the precious stone was sourced from direct milling of ore from the South lobe of the mine.

The 166-carat rough diamond recovered at Karowe. (Image courtesy of Lucara Diamond.)

Lucara’s latest find is the 328th diamond over 100 carats found at Karowe since it began operations in 2012. Chief executive William Lamb said  the recovery further supported the economic rationale for investing in the underground expansion project to extend the mine’s life to at least 2040.

The recoveries bring some positive news into a market affected by ongoing weak conditions, with prices for wholesale polished diamonds dropping 20% last year, which also dragged down rough diamond prices. 

Source: DCLA

IGI Detects 6-Carat Lab-Grown Diamond With Fake Inscription

The International Gemological Institute’s laboratory in Tel Aviv recently detected a 6-carat lab-grown diamond that someone apparently was hoping to pass off as a natural stone.

The 6.01-carat, pear-shaped synthetic diamond was fraudulently inscribed with the Gemological Institute of America report number for a G-color natural diamond of the same size and shape, but with a few key differences, IGI said in a news release issued Tuesday.

First, the lab said, photoluminescence (PL) spectroscopy, which is now widely used by grading labs to separate natural diamonds from lab-grown stones and to identify diamond treatments, shows a wavelength peak of 737 nanometers in the diamond (see chart below).

This is an indicator that the diamond was grown in a factory using the chemical vapor deposition process.

IGI photoluminescence spectra
The photoluminescence spectra for the 6.01-carat lab-grown diamond recently examined by the International Gemological Institute

Second, when examined under a microscope, IGI graders saw a carbon inclusion where the feather was indicated on the clarity plotting diagram in the GIA report.

They also noticed a cloud inclusion, resulting in IGI giving the lab-grown diamond a lower clarity grade than VVS1, the clarity grade of the natural diamond.

Lastly, there was a discrepancy between the depth of the diamond IGI examined and the depth noted on the GIA report.

“Everyone in our industry must be vigilant,” said IGI CEO Tehmasp Printer, who took over as head of the lab in October after Roland Lorie retired.

“As attempted fraud increases, the need for ongoing verification is a necessary step to protect consumers from purchasing misrepresented gems and jewelry.”

Source: DCLA