JOHANNESBURG (miningweekly.com) – Africa-focused diamond-miner Petra Diamonds has achieved its stated objective of increasing annual production to over one-million carats, with output for the year ended June 2009, reaching more than 1,1-million carats.

The company boosted output five-fold over the previous financial year, when it produced 200 287 ct.

Petra stated on Tuesday that net increase in production and sales was largely owing to the Cullinan mine, in South Africa, coming on stream in July 2008, as well as the Tanzania-based Williamson mine in November. This, however, was offset by the fall in diamond prices across all operations in line with market conditions, reduced production at the Koffiefontein and at the Star/Helam project.

“This has been a year in which Petra has established itself as a significant diamond producer. We have grown our production sustainability, continue to find world-class stones, effectively managed our cost base, and expanded our geographic footprint,” said Petra CEO Johan Dippenaar.

During the year ended June 2009, Petra recorded a mine gross revenue of $94,4-million, a 22,1% increase on the previous year. Of the most notable sales for the year, two blue diamonds were sold from Cullinan, accounting for $8,8-million and $9,4-million, respectively.

Average rough diamond prices had fallen by up to 65% between September 2008 and early 2009, Petra said in a statement. However, the company has since experienced a general price recovery in the region of 25%, in line with the improvements noted in the diamond market.

Petra stated that while challenging trading conditions remained, there were positive signs that demand for rough, and more specifically liquidity, was improving.

“Trading conditions remain challenging and our cash flow remains tight, with the recent strengthening of the rand absorbing much of the benefit of the increase in rough prices. Management will remain vigilant to guide the company through these difficult times,” said Dippenaar.

Petra reported that its rough diamond tenders have remained well attended and all parcels offered for sale have been sold, despite the difficult circumstances over the last nine months.

“Cautious optimism is at the forefront of Petra’s thinking and, while we remain aware that a softening in prices is possible, we expect prices to continue to slowly and gradually strengthen,” the company said in a statement.

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