Petra finds 507ct diamond at Cullinan, output rises fivefold

29th September 2009 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

JOHANNESBURG ( – Africa-focused diamond-miner Petra Diamonds has recovered a 507,55ct white diamond at its iconic Cullinan operations, in South Africa, the company announced on Tuesday, when it released its 2009 year-end results.

At just over 100 g, the diamond, which has yet to be named, was considered to be amongst the top 20 largest high-quality rough diamonds ever found worldwide.

The gemstone was recovered on September 24 – Heritage Day in South Africa – and was currently with experts for analysis.

“The Cullinan mine has again given the world a spectacularly beautiful and important diamond. Initial indications are that it is of exceptional colour and clarity, which suggest extraordinary potential for its polished yield. We now eagerly await the findings of the expert analysis,” said Petra Diamonds CEO Johan Dippenaar.

The diamond was recovered alongside three other special white stones of similar colour and clarity in the same production run: another stone of 168 ct and two other stones of 58,50 ct and 53,30 ct.

The Cullinan mine is renowned for producing many of the world’s most spectacular diamonds, including the largest gem diamond ever recovered, namely the ‘Cullinan’, at 3 106 ct rough. This diamond was cut into smaller gems, two of which were retained for the British Crown Jewels.

The mine is also a significant source of rare and valuable blue diamonds. In May, Petra Diamonds sold a 7,03-ct blue diamond from Cullinan for a record $9,4-million – the highest auction price ever for a fancy vivid blue.

Meanwhile, the Aim-listed miner reported that production for the year ended June 2009, had increased fivefold, to more than one-million carats, compared with the 200 287ct produced during the 2008 financial year.

The increase in production and sales were largely owing to the Cullinan mine coming on-stream in July 2008, and the Williamson mine in November 2008. This was offset by the falls in rough diamond prices across all operations in line with market conditions.

The group posted a loss of $88,9-million in the year ended June 30, compared with profit of $1,9-million the year before, owing to impairment charges.

Petra Diamonds’ profit from mining activities fell to $7,8-million in the year under review, from $38,8-million in 2008.


However, Petra Diamonds chairperson Adonis Pouroulis said that the diamond market continued to show positive signs of recovery.

Dippenaar agreed, saying that there were positive indicators that the “worst of the economic downturn is behind us”, with several major economies reporting that they had officially left recession and slight signs of improvement across the consumer confidence indices.

“In terms of global demand, although the US market continues to be the most important consumer of diamonds, it is evident that we will continue to see growth in emerging markets, notably China and India, where the urbanisation trend is set to deliver millions of new consumers to the middle classes.”

He added that China had now become the world’s third-largest diamond consumer, following the US and Japan.

“Certainly demand from the Far East has held up very well over the summer and into autumn, with the strong presence of buyers from India and China noted at various trade fairs.”

Dippenaar said that over the medium to long-term, the fundamentals of the diamond industry were compelling, as the industry was characterised by growing demand and falling supply.

World production this year was expected to be in the region of 115-million carats, down from 162-million carats, worth $12,7-billion in 2008, owing to supply cuts. While annual world production could have been considered to be around peak capacity in 2008, many of the world’s largest producing diamond mines were already in decline.

“There has been no new major economic discovery over the last decade to replace these depleting resources and supply constraints will be exacerbated by delayed capital expenditure programmes and lack of funds for exploration,” Dippenaar stated.


Meanwhile, Pouroulis said that Petra Diamonds was in the final stages of planning substantial production growth at its Cullinan mine, where it plans to boost the current level of underground production of two-million tons a year to 2,4-million tons a year by the 2011 financial year. This would be further ramped up to four-million tons a year by 2019, by deepening the current mine.

“In addition, a tailings treatment plant is being designed, and this will unlock the value in the sizeable 165-million ton tailings resources at Cullinan,” he noted.

At Kimberley Underground operations, Petra has continued to operate the three mines under care-and-maintenance while it awaited the required regulatory approvals from the South African Department of Mineral Resources.

“While it has been a long process to complete this transaction owing to the specifics of the mining right and environmental conversions, approval is expected soon,” Pouroulis noted.

A substantial upgrade of production capacity at Williamson also formed part of its group production growth plans. The Tanzania mine’s production could be increased from around two-million tons a year to ten-million tons a year, he said.

Since the effective date of the acquisition in November, Petra had been operating the mine while carrying out a feasibility study to establish the revised economics under its management.

The group holds a resource base of 262-million carats at the end of the 2009 financial year, compared with the 2008 estimate of 265-million carats.

Petra withdrew from all exploration activities in Angola, reducing annual exploration spend by $25-million in December.