Higher prices boost Gem Diamonds' first-half earnings, despite lower output
Despite a 12% year-on-year decrease in recovered carats to 41 695 ct for the first six months of this year, London-listed Gem Diamonds recorded a 33% year-on-year increase in sales value to $59.5-million.
Although the number of carat sales had decreased by 4% year-on-year to 42 624 ct for the six months to June 30, the price per carat had increased by 38% year-on-year to $1 395/ct.
"Market prices for lower-quality, small, rough diamonds remain severely impacted by synthetic diamonds. This has resulted in a number of mines, with this particular size and quality diamond footprint, suspending operations.
"Letšeng, with its exceptional quality and large diamond recoveries, however, has been less impacted, with encouragingly strong demand leading to an improvement in prices during the first half of the year," comments CEO Clifford Elphick.
The diamond miner, which owns 70% of the Letšeng mine, in Lesotho, points out that production for the first half of this year was primarily sourced from the lower-grade, lower-value Main Pipe, with a lower contribution from the higher-grade, higher-value Satellite Pipe, in accordance with the mine plan.
This resulted in a lower grade overall and, therefore, the lower carat recoveries.
Production for the remainder of the year will be sourced only from the Main Pipe, while preparations are made for the next cutback in the Satellite Pipe, the miner notes.
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