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Petra Diamonds Ltd on Monday reported its total diamond production fell by double-digits in the first half of its financial year.
Shares in Petra Diamonds were down 7.8% at 94.08 pence on Monday morning in London.
In the six months that ended December 31, Petra Diamond’s diamond production dropped by 21% to 1.4 million carats due to lower grades at the Cullinan mine, lower tonnes mined at the Finsch mine, and production suspensions at the Williamson and Koffiefontein mines.
Ore processed fell by 4% to 5.4 million tonnes, largely to production suspensions at Williamson and Koffiefontein.
Consequently, interim revenue totalled $212.1 million, down 20% from $264.7 million the year prior.
Looking forward, Petra Diamonds said it expects production at the Cullinan mine to suffer for the remainder of financial 2023 and financial 2024.
Nonetheless, the firm said it was ‘cautiously optimistic’ due to expected resilience of the luxury goods market alongside the relaxing of lockdown restrictions in China.
‘Although lower grades at the Cullinan Mine are now expected to continue through FY 2024, mitigating factors around the re-opening of Tunnels 36 and 41 and the completion of development of two new tunnels, Tunnels 46 and 50, are expected to start contributing to production in FY 2025 and more than offset the impact of lower grades this financial year and next,’ Chief Executive Richard Duffy.
Production guidance for financial 2023 is revised downwards to 2.8 million carats from between 3.3 million carats to 3.6 million carats. Production guidance for financial 2024 is also downwardly rose to between 3.0 million carats to 3.3 million carats from between 3.3 million carats to 3.6 million carats.
In financial 2022, production totalled 3.4 million carats.
By Heather Rydings, Alliance News senior economics reporter
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