Gem Diamonds Sales Rise as Prices Rebound

RAPAPORT… Gem Diamonds emerged from 2020 as one of the few miners to record revenue growth, benefiting from a sharp recovery in prices and sales during the second half.

Sales rose 4% to $189.2 million for the year, the company reported Tuesday in a trading update. The average price jumped 17% to $1,908 per carat, outweighing an 11% decline in sales volume to 99,172 carats.

Gem Diamonds had fewer goods available to sell due to a pause in activity at its high-value Letšeng mine in Lesotho during the country’s lockdown in the second quarter. Production for the full year fell 12% to 100,780 carats.

Rough prices compensated for that, reaching higher levels on a like-for-like basis in the second half of the year than before the Covid-19 pandemic. This reflected an improvement in market conditions, the company pointed out.

The miner’s sales slid 22% year on year in the first half of 2020 as the coronavirus disrupted diamond demand. However, revenue surged 67% in the third quarter as rough prices increased when the industry reawakened.

Fourth-quarter sales climbed 6% year on year to $54.6 million. The average price advanced 11% to $1,907 per carat, while sales volume fell 4% to 28,613 carats. Production for the period slipped 5% to 28,377 carats.

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