AfricaPress-Tanzania: THE revenue of Williamson Mine in Tanzania, a subsidiary of Petra Diamonds, dropped by 87 per cent in the first half of 2021 compared to 52.5 per cent increase posted in the corresponding period 2020, largely on account of price fall in the world market.
Trading updates by Petra Diamonds Limited for the six months ending December last year ahead of the publication of the company’s interim results for the period next month show that price declined by 18 per cent compared to 177 per rise posted in the similar period in 2020.
According to the half-year financial statement, the company’s revenue declined to $4.6m in the period under review from $35.9m registered in the corresponding period in 2020. The average per carat in the reference period dropped to $150 compared to $184 in the corresponding period, a year before.
The diamond sold during the period was 30,339 carats, down from 194,835 carats traded in the first half of 2020. In November last year, Petra Diamond said Williamson Mine in Tanzania remained under care and maintenance with the recommencement of operations depending on improved market conditions and rough diamond pricing.
The statement unveiled further that Williamson Mine in Tanzania continued remaining under care and maintenance until market conditions and rough diamond price improved. The mine in Mwadui, Shinyanga, was placed under care and maintenance in the last six months after coronavirus was declared a pandemic and affected diamond price globally.
Petra said in a quarter-one statement that the diamond market showed some modest improvement for the coming year, but there was still uncertainty around further disruption due to Covid-19 related restrictions.
“Sales post period end indicated like-for-like price movements up ca. 2.0 per cent from the September tender. The company is continuing its flexible approach in planning its upcoming tenders in light of the Covid-19 challenges,” Petra said.
The firm, which also has three diamond mines in South Africa, four months ago announced the sale of its stake in Williamson.
However, its partner, the government of Tanzania, halted the sale because it was not notified. Petra said risks to tender timing remained as a result of possible restrictions that might be re-imposed, following a second wave of Covid19 infections currently being experienced in a number of countries, including Belgium.
However, conditions in the diamond industry are improving as lockdown measures around the world are lifted and retail outlets are reopened. Since the outbreak of Covid-19, a period of sustained low supply, particularly from the majors De Beers and ALROSA, has allowed a better equilibrium in the market, and there is now improved demand from the downstream as retailers look to put orders in place in time for the festive retail season.
The cutting and polishing factories of India have ramped up to ca. 60 per cent capacity under Covid-19 guidelines, but are looking at how to maximise working hours to meet demand, including observing a much shorter holiday period for Diwali than usual.
Many producers have reinstated their usual sales tender pattern to match demand.
However, all participants in the industry recognise that risks to a sustained recovery remain, particularly in light of the current resurgence of Covid-19 in key diamond markets, and much will depend on the level of consumer activity in the coming months, especially in the major US market.
