South Africa Riots Dent BlueRock Production Plan

Aug 11, 2021 9:16 AM By Rapaport News

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RAPAPORT... BlueRock Diamonds has cut its output guidance for the year amid an increase in Covid-19 cases and riots in South Africa that have impacted operations.

The miner now expects to produce between 24,000 and 28,000 carats for the year from its Kareevlei mine, versus the 30,000 to 39,000 it originally predicted, it said Monday. Protests over the imprisonment of former president Jacob Zuma have led to a longer-than-expected wait for equipment necessary to run the plant. This has forced it to postpone the ramp-up to full production.

“South Africa continues to struggle with the Covid-19 pandemic and, more recently, with the unfortunate disturbances which resulted in many companies temporarily ceasing operations,” said BlueRock executive chairman Mike Houston. “Our management have successfully kept operations running despite a step-up in Covid-19 cases. However, we have been impacted by equipment delivery delays because of the riots.”

Although the company has sharply decreased output figures, it has lowered its revenue forecast only slightly because of strong rough prices. It now projects annual revenue of $11 million, compared to the $11.7 million it predicted at the start of the year.

“The market remains buoyant, with our average sales price for the year to July 2021 being in excess of $430 per carat,” Houston explained.

Separately, BlueRock has recovered two high-value diamonds weighing 21.56 and 9 carats. The larger stone, a round, D-color diamond, is likely to “significantly exceed” the miner’s previous record price achieved for a diamond, it noted. That honor is held by a 20.7-carat stone BlueRock sold in 2019 for $236,000. The 21.56-carat stone will be offered in the company’s August tender.

Image: Rough diamonds from the Kareevlei mine. (BlueRock Diamonds)

Tags: BlueRock, BlueRock Diamonds, COVID-19, Jacob Zuma, Kareevlei, Kareevlei mine, Mike Houston, Rapaport News, South Africa