New York – Two mining companies have noted a recent slowdown in demand for rough diamonds, echoing recent market comments from De Beers Group.
In its fourth quarter and full year results, Petra Diamonds said it had deferred the majority of its Tender 6 rough diamond sales into the 2024 financial year due to a “temporary” slowdown in demand for rough diamonds.
Petra owns the Cullinan and Finsch mines in South Africa, both formerly owned by De Beers. It is in the process of closing a third South African mine it acquired from De Beers, Koffiefontein.
Petra also has Williamson in Tanzania, although 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 tailings dam was breached. The mine reopened this month ahead of schedule, Petra said.
Petra’s full-year FY2023 sales fell 34 percent to 2.3 million carats, while production fell 20 percent to 2.6 million carats, with the company missing its production target (2.8 million to 2.9 million carats).
Revenue fell 44 per cent to $328.4 million due to lower production, the recovery of fewer exceptional diamonds and the miner’s decision to defer one of its sales into FY2024.Meanwhile, Canadian miner Mountain Province Diamond sold 360,308 carats of rough diamonds in the second quarter for a total of $44.6 million, at an average price of $124 per carat.
The number of carats sold, total revenue and average price per carat were down 39 per cent, 40 per cent and 4 per cent respectively year-on-year as the miner had one fewer sale in Q2 2023 than in Q2 2022.
Mountain Province has a 49% interest in the Gahcho Kué mine in Canada’s Northwest Territories, a joint venture with De Beers, and owns 100% of Kennady North, a diamond exploration project surrounding Gahcho Kué.
Like Petra, Mountain Province has recently experienced a softening in the rough diamond market.
Company President and CEO Mark Wall said: “In the rough diamond market, we have been pleased to see our sales performance remain resilient amid some broader market turbulence.Petra and Mountain Province both reported their latest financial results last week, the same week that De Beers and another diamond miner, Rio Tinto, released their Q2 production results.
Rio Tinto, which reported a 16 per cent drop in production, did not comment specifically on the diamond market, but noted that commodity prices fell in the second quarter amid slowing demand.
It also said that a US recession “remains likely” later this year.
