JOHANNESBURG (miningweekly.com) – Diamond mining company Petra believes that diamond prices will stabilise through to the end of this year with some improvement expected in 2025.

The average diamond price realised by Petra  in financial year (FY24) – the 12 months to June30 – was $116/ct, down 17% from $139/ct in FY23, owing mainly to a 12.4% decline in like-for-like prices, with the balance attributed to product mix movements.

An adjusted net loss of $46-million was recorded, compared with $2-million for FY23.

Headed by CEO Richard Duffy, the London-listed Africa-operating diamond mining company has responded to the weaker diamond pricing environment via expansion programme deferral, cost-base reduction and a $75-million cut in planned cash expenditure.

In South Africa’s Northern Cape province, Petra’s Finsch diamond mine has transitioned from being a producer of 2.8-million tons a year to one with an output of 2.2-million tons a year and greater emphasis being placed on planning and maintenance.

Despite pulling in its horns in this way, Petra remains confident of meeting FY25 guidance amid incipient access to fresh ore from newly developed South African mine project areas and full production being back at the Willamson mine in Tanzania.

Moreover, free cash flow generation is now also being targeted on a smoothed capital profile and $44-million lower annual operating costs going forward, made up of a $30-million reduction at South Africa’s operations and a $14-million reduction at Williamson. 

To assist in rebalancing inventory across the pipeline, ongoing discipline by producers is anticipated.

“We continue to see supportive market fundamentals in the medium and longer term,” Duffy commented in a release to Mining Weekly.

TRACEABILITY TECHNOLOGY

Traceability technology is being implemented to enable Petra’s South African operations to trace gem-quality diamonds bigger than 0.5 ct from mine-to-finger and provide provenance, origin assurance and verification along with sustainability credential information. Social and community projects supported through the purchases of Petra diamonds will be highlighted

“We believe traceability technologies will further differentiate natural diamonds through highlighting their rarity, uniqueness and benefits to stakeholders,” said Duffy.

Through an open market repurchase programme, Petra has, to date, repurchased and cancelled $12-million of its 2026 2L Notes at a cost of $9-million, resulting in future interest savings of $1.2-million a year.

In the 12 months to June 30, Petra generated revenue of $367-million, up on last year’s $325-million.

Total on-mine cash costs increased 11% compared to FY23 largely owing to the ramp-up at Williamson and cost inflation.

Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) – that is, profit from mining activities less adjusted corporate overhead – fell to $66-million at an Ebitda margin of 18%, down on the 35% of last year.

Consolidated net debt decreased from $212-million at 31 December 2023 to $201-million.