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Petra Postpones June Rough Sale

June 7, 2023  |  Joshua Freedman

Petra Diamonds has called off this month’s rough tender due to the sluggish market and has predicted a negative impact on its fiscal-year sales.

The company was scheduled to offer around 230,000 carats from the Cullinan mine and about 150,000 carats from Finsch at the June sale, it said Wednesday. Instead, it will tender these goods in August alongside approximately 75,900 carats of mostly higher-value rough it withheld from the May tender as well as run-of-mine production from Cullinan and Finsch.

Demand usually improves in August as the summer holidays end and manufacturers start filling orders ahead of the festive season, the miner explained.

“In light of what we expect to be a temporary slowdown in the market for rough diamonds as a result of elevated inventory in the midstream, we have taken the decision to postpone the majority of our tender-six rough-diamond sales,” said Petra CEO Richard Duffy.

The change will impact results for the current fiscal year, since this ends on June 30, management cautioned. However, the company’s resilience and strengthened balance sheet has enabled it to be flexible with the timing of tenders, Duffy noted. The company will not need to draw on its ZAR 1 billion ($52 million) revolving credit facility, he added.

The rescheduling “will defer sales revenues for only a relatively short period, and we believe it is in the best interests of the business and shareholders,” the executive said.

Petra held back 75,880 carats of gem- and near-gem-quality rough in all size ranges at its May tender, while prices fell 13% versus March for the items that did sell.

Weak retail sales in the US mid-market and in China have hit the rough sector in recent months. De Beers reduced prices by 5% to 10% in certain larger categories at its June sight and postponed an auction scheduled for late May.

Petra owns the Cullinan, Finsch and Koffiefontein mines in South Africa and is in the process of selling its stake in Tanzania’s Williamson mine. It will report its preliminary fiscal-year results on September 12.

Image: A sorter at the Finsch mine in South Africa. (Petra Diamonds)


Petra Postpones June Rough Sale

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