Diamond miner Petra Diamonds sold 447 276 ct of diamonds for $61.3-million during its second tender for the 2023 financial year.
Sales were up 6% year-on-year as a result of the final closure date of the tender being extended owing to unusual market conditions with some build-up in inventory pre-Diwali.
Volumes for the second tender cycle, originally planned towards the second half of October, are typically lower than the first tender cycle because of the respective cut-off dates for these cycles.
Petra’s third sales tender for the 2023 fiscal year is currently planned to close in early December; but the miner notes that it will continue to be flexible in its approach thereto.
The results of the second tender bring 2023 fiscal year revenue from rough diamond sales to $164.1-million, with no exceptional diamond sales for the year to date. This compares with revenue of $136.4-million in the first two tenders of the 2022 fiscal year, which included a $50.2-million contribution from exceptional diamonds in the period.
While like-for-like rough diamond prices declined by 5.1% on the first tender for the period, they increased 12.6% compared with the second tender of the 2022 fiscal year, with year-to-date prices up 19% on a like-for-like basis compared with the first two tenders of the 2022 fiscal year.
“This is a creditable result in the current somewhat muted market, with like-for-like prices 12.6% higher compared to [2022 fiscal year] tender two and 5.1% lower than tender one of [fiscal year 2023],” says CEO Richard Duffy.
He adds that demand for fancy-coloured and large white diamonds continued to be evident despite this being a seasonally weaker period. “Subdued demand in China continued to impact pricing in the gem quality 0.75 ct up to 5 ct size ranges, with some pricing pressure also evident in the 5 ct to 10 ct range. Pricing across smaller size ranges was largely flat on the previous tender.”
Petra notes that the balance of price movements is attributable to product mix, particularly for its Cullinan mine, where the previous tender cycle benefited from an increased number of high value diamonds, which largely normalised in the second tender and resulted in a lower overall price per carat.
Although Petra continues to expect a supportive diamond market in the medium to longer term as a result of the structural supply deficit, Duffy says the miner expects current levels of demand continuing into the New Year, albeit with the potential upside of festive season sales and any easing of lockdown restrictions in China.