Petra Postpones First Tender to Limit Diamond Supply

Petra Diamonds will defer all South African goods from its first tender scheduled to take place in the August-September period, in an effort to limit rough supply in the midstream amid the soft market. 

“We have taken the proactive decision to defer the upcoming…tender from our South African operations, to support steps taken by major producers to restrict supply in this weaker demand period,” said Petra CEO Richard Duffy.  

Petra owns two South African diamond deposits — Cullinan and Finsch — after selling the Koffiefontein mine to Stargems in April. The miner still plans to sell rough from its Williamson mine in Tanzania, it noted. 

The miner believes withholding the rough for a short time will create near-term benefits for prices in the coming holiday season. 

“Our expectation is that supply discipline, together with the expected seasonally stronger demand as we head towards the festive season, will provide some pricing support later in the calendar year,” Duffy added. “Our recent steps to create a stronger balance sheet have provided us with flexibility around the timing of our tenders to respond to prevailing market conditions, and we have adequate liquidity, including available and undrawn balances on our existing revolving credit facility, to fund our working capital requirements.” 

Petra will combine the rough that was scheduled for its first tender with goods to be offered at its second tender, expected to close in mid-October, it said.  

Image: Rough diamonds. (Petra Diamonds)