JOHANNESBURG (miningweekly.com) – JSE- and Aim-listed Petra Diamonds' production increased by 6% to 1,16-million carats in the year ended June 30, 2010, compared with the 1,09-million carats produced the year before.

Diamond sales were up by 11% to 1,13-million carats, compared with 1,01-million carats the year before, while revenues surged by 88% to $177,7-million, compared with $94,4-million in the 2009 financial year.

"These results signify a further step change for Petra, with substantially higher revenues reflecting our continued production growth and a strong recovery in rough diamond prices," said CEO Johan Dippenaar.

Petra noted in a statement to shareholders on Tuesday that by the end of June, rough diamond prices had returned to June 2008 and July 2008 levels, before the onset of the global economic crisis.

It added that demand growth from China and India continued at a double-digit pace, with some commentators expecting China to grow to equal the US diamond market within the next decade.

While the 2010 global rough diamond supply would increase on that of 2009, as a result of increased sales from De Beers and Russian miner Alrosa, a significant shortfall in supply would again emerge in the next three years to five years, owing to supply constraints, stated the company.

Petra's 74%-owned Cullinan mine had seen a 4% increase in production to 927 931 ct, compared with 888 595 ct in the 2009 financial year.

The diamond miner was planning to expand output at the mine to 2,6-million carats a year by 2019.

Output at the Koffiefontein mine was up by 16% to 60 260 ct, compared with 52 089 ct last year, while production from the Fissure mines rose by 4% to 74 232 ct, compared with 71 274 ct in 2009.

Petra noted that the Kimberley Underground mine, which it acquired in May, would contribute meaningful production in the 2011 financial year.

The mine was expected to produce 100 000 ct in its first year, after which output would increase to 180 000 ct/y when a second production plant is commissioned in June 2011.

Meanwhile, Petra's 75%-owned Williamson mine, in Tanzania, saw a 20% increase in output to 101 071 ct in the 2010 financial year, compared with the 84 486 ct produced the year before.

An expansion plan, which was under way and which would be implemented over the next three years to four years, would increase throughput at the mine to ten-million tons a year, up from the current two-million tons a year. The increased tonnages would yield about 600 000 ct.

Petra noted that it expected the Williamson mine to only contribute meaningful revenues again in the 2013/14 financial year.

$3M THEFT CLAIM REJECTED

Meanwhile, Petra reported that underwriters had rejected the company’s insurance claim for $3-million worth of diamonds that had been stolen at the OR Tambo International Airport, in South Africa, in October 2009.

The miner said that the claim was rejected on technical grounds, adding that the company was assessing its options regarding the loss.

The 14 931 ct that had been stolen had been produced at the Williamson mine.

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