Petra in the Red as Mines Lose Value

RAPAPORT… Petra Diamonds saw heavy losses in the latest fiscal year as sales slid and weakening rough prices reduced the value of its mines.

The net loss of $223 million for the 12 months ending June 30 included an impairment charge of $85.5 million at its Cullinan, Finsch, Koffiefontein and Williamson mines, the company reported Tuesday in delayed results. It also reflected a 36% drop in revenue to $295.8 million, largely due to the Covid-19 crisis in the final months.

“The continued downturn in the global rough-diamond market, impact of the Covid-19 pandemic and variability in product mix have severely impacted rough-diamond prices achieved by Petra, resulting in management taking a critical review of the group’s business models and operational assets,” the company said.

The net loss was one of the miner’s worst on record, though it was less severe than the $258.1 million loss it incurred last year, when the impairment charge at the four mines was even greater as a result of a drop in prices of small rough.

Sales volume slumped 23% to 2.9 million carats for fiscal 2020, while production declined 7% to 3.6 million carats.

Petra released its full-year results later than usual, making use of a special UK rule allowing companies an extra two months during the coronavirus pandemic to publish audited financial statements.

Image: Conveyor belt at the Finsch mine in South Africa. (Petra Diamonds)