JOHANNESBURG (miningweekly.com) – Sales revenue from JSE-listed Trans Hex’s South African operations decreased by 45.6% from R275.3-million to R149.7-million for the six months ended September 30.
The average US dollar diamond price decreased by 20.1%, mainly owing to a weaker market and a decrease in average stone size, the company said in a statement on Thursday.
Sales were negatively affected by an 11.8% strengthening of the rand against the dollar and a 22.9% decrease in carats sold.
“South African production decreased by 16.2% to 15 917 ct, mainly owing to the closure of Bloeddrif mine and underperformance at Baken mine,” the statement said.
At West Coast Resources, in which Trans Hex holds a 40% stake, production amounted to 60 344 ct and sales amounted to R118.5-million at an average price of $156/ct.
The 40% equity-accounted loss for the period amounted to R13.1-million.
South African operations showed a loss before tax of R211.4-million.
In Angola, production at Somiluana mine, in which Trans Hex holds a 33% stake, decreased significantly to 67 083 ct, owing to a 15% decrease in average grade and a 13.3% decrease in gravel treated.
Total sales amounted to $27.7-million at an average price of $531/ct.
Profit from the Angolan continuing operations amounted to R11.4-million, consisting of Somiluana’s equity-accounted profit of R18.7-million less Angolan head office costs of R7.3- million.
The market softened for rough and polished stock during the period, as margins came under pressure in both the manufacturing and trading sectors.
A surplus in polished diamond inventory, particularly in the Indian factories, as well as concerns regarding high debt levels, further negatively impacted on prices.
Marginal price increases are expected for the remainder of the calendar year, with prices set to recover towards the start of 2018.