Rough prices slumped at Petra Diamonds’ March tenders as buyers sought discounts due to the slowdown in the market caused by the COVID-19 pandemic.
Goods from Petra’s South African mines sold for 27% less than in February on a like-for-like basis, the company reported last week. As a result, the miner chose to sell only 75% of its available volume and exported the rest to sell in Antwerp. Petra sold 75% of those remaining goods in Antwerp, but held back 24,254 carats of mainly higher-value rough weighing more than 10.8 carats. The company intends to sell those diamonds privately, or at a later date when conditions improve, it noted.
“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 CEO Richard Duffy.
The miner has an additional two tenders scheduled in May and June, prior to the close of its fiscal year. However, the company is not sure whether it will be able to hold either sale, as it continues to monitor the coronavirus-related regulations in all its markets.
Petra has placed its operations in South Africa on care and maintenance to comply with a 21-day lockdown in the country. While the initial closure was due to end on April 17, President Cyril Ramaphosa extended it another two weeks, he announced on Thursday after Petra’s update.
The miner will keep its Williamson deposit in Tanzania on care and maintenance until rough diamond prices stabilize to protect the long-term sustainability of the operation, it added. During that time, only essential services will be carried out at the site.
Petra will also delay the release of its trading update for the third fiscal quarter until May, when it has a better grasp on the situation.
Image: The Finsch mine. (Petra Diamonds)