Sourcing

2 More Miners Note Softness in Rough Diamond Market

SourcingJul 24, 2023

2 More Miners Note Softness in Rough Diamond Market

Petra Diamonds and Mountain Province both noted a slowdown in demand in their most recent earnings reports.

Rough diamond from the Gahcho Kué mine in Canada
Rough diamonds from the Gahcho Kué mine, a joint venture between Mountain Province Diamonds and De Beers Group. Commenting on the rough diamond market last week, Mountain Province President and CEO Mark Wall noted the presence of “broader market turbulence.”
New York—Two mining companies noted a recent slowdown in demand for rough diamonds, echoing the latest remarks on the market from De Beers Group.

In its fourth-quarter and full-year results, Petra Diamonds said it has pushed the majority of its Tender 6 rough diamond sales into fiscal year 2024 because of a “temporary” slowdown in demand for rough diamonds.

Petra owns the Cullinan and Finsch mines in South Africa, both former De Beers properties. It is in the process of closing a third South African mine it acquired from De Beers, Koffiefontein.

Petra also has Williamson in Tanzania, though it sold about half its stake in the diamond mine in May. 

Williamson was closed in November 2022 after a wall at the mine’s tailing dam was breached. The mine reopened this month, ahead of schedule, Petra noted.  

Petra’s full-year sales were down 34 percent in its FY2023 to 2.3 million carats, while production was down 20 percent to 2.6 million carats, with the company falling short of its production target (2.8 million to 2.9 million carats). 

Revenue fell 44 percent to $328.4 million due to production being down, the recovery of fewer exceptional diamonds, and the miner’s decision to push one of its sales into FY2024. 

 Related stories will be right here … 

Meanwhile, Canadian mining company Mountain Province Diamond sold 360,308 carats of rough diamonds in the second quarter for a total of $44.6 million, an average price of $124 per carat. 

The number of carats sold, total revenue and average price per carat were down 39 percent, 40 percent, and 4 percent year-over-year, respectively, due to the fact the miner had one fewer sale in Q2 2023 than it did in Q2 2022. 

Mountain Province holds a 49 percent stake in the Gahcho Kué mine in Canada’s Northwest Territories, a joint venture with De Beers, and holds a 100 percent in Kennady North, a diamond exploration project surrounding Gahcho Kué. 

Like Petra, Mountain Province noted a recent softening in the market for rough diamonds. 

Company President and CEO Mark Wall said, “On the rough diamond market, we were glad to see our sales performance stay resilient amongst some broader market turbulence.” 

Petra and Mountain Province both reported their latest financials last week, the same week that De Beers and another diamond mining company, Rio Tinto, released their second-quarter production results.

Rio Tinto, which reported a 16 percent drop in production, did not make any comments about the diamond market specifically but did note that commodity prices fell in Q2 amid slowing demand. 

It also said a U.S. recession is “still likely” later this year. 

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.
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