Petra Mulls June Tender After Rough-Price Slump

RAPAPORT… Petra Diamonds is considering whether to hold a rough tender in June after a market slowdown prompted it to cancel its May sale.

Prices fell 27% in March and April compared with February as the Covid-19 pandemic reduced business activity throughout the supply chain, the company reported Friday. Having called off the May sale, it is now considering holding a tender in South Africa and Antwerp in June, as the Belgian city’s diamond market has shown signs of reopening.

“However, we expect prices to remain subdued until such time as activity levels across the pipeline are able to increase in a safe manner,” the miner added.

Revenue dropped 32% year on year to $91.3 million in the company’s third fiscal quarter ending March 31 as Covid-19 impacted pricing at the March tender. Sales volume rose 2% to 1.1 million carats, while production increased 1% to 932,456 carats despite a lockdown in South Africa that limited operations at its Cullinan, Finsch and Koffiefontein mines from March 26 onward. The company placed its Williamson mine in Tanzania on care and maintenance in mid-April because of the weak market.

Petra has also reached agreements with its lenders and bondholders to help it manage its liquidity situation during the downturn.

Image: Petra’s Finsch underground diamond mine. (Petra Diamonds)