Letšeng Prices Exceed Pre-Pandemic Levels

RAPAPORT… Gem Diamonds’ sales rose sharply in the third quarter as rough prices from its lucrative Letšeng mine in Lesotho topped pre-coronavirus levels amid a recovery in the large-stone market.

Revenue grew to $60.5 million in the three months ending September 30, the company said Wednesday — a 67% rise versus the amount it reported for the same period a year ago. The average selling price jumped 56% to $2,215 per carat, boosted by the September sale of the 439-carat Letšeng Icon, while prices of individual rough categories also improved.

“These prices achieved on a like-for-like basis are higher than those realized in the pre-Covid-19 market conditions of [the second half of 2019],” said Gem Diamonds CEO Clifford Elphick.

The global diamond market picked up in the third quarter following months of inactivity, driven by the approaching holiday season and shortages of polished in the midstream. Larger rough — the segment in which Gem Diamonds mainly operates — saw a stronger recovery than smaller stones during the period, according to dealers.

Petra Diamonds, which produces a lower average quality of rough, observed a 10% drop in prices versus pre-pandemic levels in a trading update Tuesday, “potentially pointing to mix disparity,” noted investment bank Berenberg.

Gem Diamonds’ sales volume increased 7% year on year to 27,326 carats, while production climbed 6% to 29,127 carats.

Image: Large diamonds from the Letšeng mine. (Gem Diamonds)