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DiamondCorp Rough Prices Lag Expectations

Dec 12, 2016 6:01 AM   By Rapaport News
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RAPAPORT... Troubled miner DiamondCorp reported a lower-than-expected average price at its latest rough tender because of weaker demand for smaller goods and a shortage of higher-quality large stones.

The miner sold 5,117 carats of rough diamonds for $590,745, or $115 per carat, bringing down the average value for the year to $146 per carat versus a forecast of $164 per carat. The sale in Johannesburg comprised goods recovered prior to subsidiary Lace Diamond Mines (LDM) being placed in business rescue last month because of severe flooding that prompted an extended shutdown.

“While a proportion of this fall is the result of the weaker market in the lowest size fractions, it is largely the absence of high-quality gems among the larger stones in the last two sales,” the company said. “One large gem could just as easily swing the average the other direction.”

Five of the diamonds sold were larger than 10 carats, but all the larger goods – including a 19.43-carat stone – were either non-gem quality or contained carbon inclusions or cracks, lowering their valuations. Nonetheless, all reserve prices were exceeded, DiamondCorp stated.

Diamonds up to 5 carats fetched prices that were comparable with or better than those achieved throughout the year, but prices in the smallest categories were weaker, the company added. This mirrors reports by miners such as ALROSA and Stornoway Diamond Corporation that demand for smaller rough diamonds has fallen because of reduced liquidity in India following the government’s decision to invalidate INR 1,000 and INR 500 currency notes.
Tags: Alrosa, Demonetization, DiamondCorp, India, Lace, Lace Diamond Mines, Lace Mine, LDM, Rapaport News, stornoway, Stornoway Diamond Corporation
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