Petra Diamonds’ fifth sales cycle registered a 27% drop in rough diamond prices on a like-for-like basis in comparison to the fourth sales cycle in February.
The mid-tier diamond producer said it experienced depressed and opportunistic bidding for its diamonds at the fifth sales cycle, particularly in the larger size and higher quality, greater value categories.
It, however, chose to only sell a portion of its South African goods, representing 75% by volume and 50% by value.
Image credit: Petra Diamonds
The remaining goods were exported to Antwerp and of these, 75% were subsequently sold at its Antwerp marketing office.
Petra said a total of 24,254 carats, comprising higher value +10.8 carat single stones as well as parcels across the size and quality ranges, were withdrawn and will be sold privately or at a subsequent sales cycle, when market conditions allow.
The company was due to hold two further sales in May and June before the end of its financial year.
Petra said it will continue to monitor marketing conditions before taking any decision on the continuation of the planned May tender while the outlook for the June sale remains uncertain and will depend on travel and export conditions at the time, as well as activity levels in the key diamond buying centres of India, Israel, China and the US.
Meanwhile, Petra said it remains focused on taking all actions necessary to support the measures to limit the outbreak of COVID-19 in the countries in which it operates and to decrease the threat to our employees, contractors and other local stakeholders.
The company has also declared force majeure at the Williamson mine in Tanzania due to the unprecedented depressed market environment.
It will place the operation on care and maintenance from the middle of April, with only essential services to be carried out in order to protect the mine’s assets and resources.
“This decision is necessary to preserve the Williamson mine’s cash position in order to protect the long-term sustainability of the operation,” said Petra.
“The company will look to resume operations once diamond prices are at a level that make it operationally sustainable.”
The company has also decided to delay the release of its third quarter results for the fiscal year 2020 to late May in order to be in a position to provide a fuller update to the market, particularly around its liquidity and capital structure.
“Given the unprecedented trading conditions, we are taking all steps necessary to preserve the company’s liquidity position in order to withstand this very difficult period until market conditions improve,” said Petra chief executive Richard Duffy.
“We remain committed to protecting the ongoing viability of our operations, to the benefit of all our stakeholders.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
The company was due to hold two further sales in May and June before the end of its financial year.
Petra said it will continue to monitor marketing conditions before taking any decision on the continuation of the planned May tender while the outlook for the June sale remains uncertain and will depend on travel and export conditions at the time, as well as activity levels in the key diamond buying centres of India, Israel, China and the US.
Meanwhile, Petra said it remains focused on taking all actions necessary to support the measures to limit the outbreak of COVID-19 in the countries in which it operates and to decrease the threat to our employees, contractors and other local stakeholders.
The company has also declared force majeure at the Williamson mine in Tanzania due to the unprecedented depressed market environment.
It will place the operation on care and maintenance from the middle of April, with only essential services to be carried out in order to protect the mine’s assets and resources.
“This decision is necessary to preserve the Williamson mine’s cash position in order to protect the long-term sustainability of the operation,” said Petra.
“The company will look to resume operations once diamond prices are at a level that make it operationally sustainable.”
The company has also decided to delay the release of its third quarter results for the fiscal year 2020 to late May in order to be in a position to provide a fuller update to the market, particularly around its liquidity and capital structure.
“Given the unprecedented trading conditions, we are taking all steps necessary to preserve the company’s liquidity position in order to withstand this very difficult period until market conditions improve,” said Petra chief executive Richard Duffy.
“We remain committed to protecting the ongoing viability of our operations, to the benefit of all our stakeholders.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
