London—Petra Diamonds has unveiled extensive expansion plans for its key South African mines, targeting a significant boost in annual production over the next few years despite ongoing uncertainties in the diamond market.
During an investor day, the UK-listed diamond producer announced its intention to increase production at its Finsch and Cullinan mines to between 3.4 and 3.7 million carats by 2028. This ambitious growth trajectory of 15% to 17% over the next three years will require an annual investment of approximately $100 million in sustaining and expansion capital.
Petra CEO Richard Duffy emphasized that the expansion would be self-funded, underscoring the company’s commitment to financial prudence amidst market volatility. The recent appointment of Johan Snyman as the new CFO, effective October, further strengthens Petra’s executive team. Snyman, previously vice-president of financial reporting at AngloGold Ashanti, will succeed Jacques Breytenbach, who announced his departure earlier this year for personal reasons.
This announcement comes at a critical time for Petra Diamonds, which has been navigating the unpredictable diamond market. Despite recent setbacks in market conditions, including a downturn in sales reported by De Beers, Duffy remains optimistic about Petra’s resilience and strategic direction.
“We have worked diligently to refine our business strategy in response to ongoing market dynamics, enhancing our ability to weather future cycles,” Duffy stated.
Petra Diamonds’ share prices responded positively to the news, gaining nearly 3% in early London trade. However, the company has experienced significant pressure on its valuation this year, with shares down 37% year-to-date.
Looking ahead, Petra’s expansion plans underscore its confidence in the long-term prospects of its South African operations. The iconic Cullinan mine, renowned for its historic discovery of the 3,106-carat Cullinan Diamond, is expected to remain operational until 2048, while the Finsch mine is projected to continue production until 2038.
As Petra Diamonds charts its course amidst market challenges, the company’s strategic investments and operational enhancements aim to solidify its position in the global diamond industry, bolstering growth and sustainability in the years to come.
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