Firestone Diamonds saw a decline in sales during its fiscal fourth quarter due to a drop in demand for small, lower-value diamonds that make up the bulk of its supply.
The company reported sales of $12.7 million for the three months that ended June 30, representing a decline of 32% from the previous year. Sales for the fiscal year fell 9% to $56.9 million, according to Rapaport records.
“From a market and pricing perspective, it was a tough financial year, particularly for the smaller, lower-value goods,” CEO Paul Bosma said in an operations update published Thursday. “These conditions are expected to persist for the rest of [calendar] 2019 and possibly improving during 2020 when global rough supply is expected to reduce.”
Full-year production at the Liqhobong mine in Lesotho, Firestone’s only operation, declined 1% to 829,458 carats. The average sales price fell 2% to $73 per carat, as a buildup of rough and polished inventory in the midstream led to “subdued” prices for smaller and lower-quality goods, the company explained.
Firestone expects its prices to be supported by a decline in global supply in 2020 due to lower volumes from De Beers and the pending closure of Rio Tinto’s Argyle mine. The company is planning production of 820,000 to 870,000 carats in fiscal 2020.
Image: The Liqhobong mine in Lesotho (Firestone Diamonds)