Although the development of the mine had progressed “well” and near commencement of full commercial production, the material fall in the prices of its diamonds from $210 per carat in early 2015 to $142 per carat during the December sale, accentuated the weak state of the diamond market for this category of diamonds, it said.
“With the company's focus on profitable production, the decision has been made to place the asset on care and maintenance, and to continue to monitor market conditions for a time when commencing full production would make economic sense,” said Gem Diamonds.
“It is anticipated that, post once off settlement costs, this will result in an annualised care and maintenance cost of $3 million.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished