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Letšeng Sales Fall as Large-Diamond Output Drops
Feb 6, 2017 9:17 AM
By Rapaport News
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RAPAPORT... Gem Diamonds said sales from its high-value Letšeng mine
fell 22 percent last year as the company extracted fewer large rough diamonds
than expected.
Sales from the deposit in Lesotho slid to $184.6 million in
2016, the miner reported. By volume, sales rose 6 percent to 108,945 carats,
with the average price slumping 26 percent to $1,695 per carat.
Production at Letšeng of rough diamonds weighing 100
carats or more has crept up every year from three stones in 2012 to a peak of
11 in 2015, before falling to four last year. The decline in 2016 was because
of normal variation in the mine’s output which the company also experienced in
2012, Gem Diamonds explained following a review.
“The market for large
special diamonds for which Letšeng is renowned has remained firm to date, but
the relative paucity of these diamonds recovered during 2016 has had an adverse
impact upon the company’s revenues and cash flows during the year,” said Clifford
Elphick, chief executive officer of Gem Diamonds.
“This is expected to revert to normal in the near future,” Gem
Diamonds said. The company is considering investing in a plant dedicated to
large diamonds as a way of reducing damage to these exceptional stones during
the mining process and enabling more of them to reach the market, it added.
Production of rough diamonds of all sizes at the project amounted
to 108,206 carats versus 108,579 a year earlier.
Meanwhile, production at the Ghaghoo mine in Botswana dived
55 percent to 40,976 carats. Gem Diamonds sold 16,989 carats of rough from the
mine on tender in December for $2.4 million at an average price of $142 per
carat. The project remains under review largely because of the weak prices
achieved, the miner said.
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Tags:
Botswana, Clifford Elphick, Gem Diamonds, Ghaghoo, Lesotho, Letšeng, mining, Rapaport News, Rough Diamonds
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