Petra Diamonds has reduced its production outlook for the coming years after putting one of its South African mines on care and maintenance and suffering operational challenges across the company.
The Koffiefontein deposit “has been loss-making for several years, and low morale remains a risk to the mine’s safety performance,” Petra said Monday in its half-year operating update. “Operations were halted to ensure all assessed risks were adequately mitigated for.”
The company had been exploring options for a sale of the mine as it approaches the end of its lifespan, but no buyers have emerged. It informed employees about the situation in November, management explained.
As a result, the company has slashed its production guidance to 2.8 million carats for the current fiscal year, which ends on June 30, from an earlier plan of 3.3 million to 3.6 million carats. For the following 12 months, output will likely range from 3 million to 3.3 million carats, down from a previous outlook of 3.3 million to 3.6 million carats. The forecast for the fiscal year ending June 2025 remains unchanged at 1.7 million to 1.9 million carats, as Koffiefontein was already due to close by then.
The drops also reflect a shutdown at the Williamson mine in Tanzania, where production is on pause following a wall breach. Petra expects output to resume there in July at the earliest.
Group production fell 21% year on year to 1.4 million carats in the first fiscal half, which ended on December 31, as lower grades at the Cullinan mine and operational issues at Finsch — both located in South Africa — compounded the problems at Koffiefontein and Williamson.
Revenue dropped 20% to $212.1 million for the six months, while sales volume slid 18% to 1.3 million carats. Exceptional rough stones — those fetching $5 million or more — didn’t contribute any revenue during the period, having grossed $77.9 million a year before.
Image: A conveyor belt at the Koffiefontein mine. (Petra Diamonds)