Africa-focused diamond- miner Petra Diamonds has achieved its stated aim of increasing the company’s yearly production to over one-million carats, with output for the year ended June 2009 representing a fivefold increase over the previous financial year, when it produced 200 287 ct.
Petra CEO Johan Dippenaar comments that the company currently has a strong portfolio of assets enabling it to deliver substantial growth in the coming years.
“This has been a year in which Petra has established itself as a significant diamond producer. We have grown our production sustainability, continue to find world-class stones, effectively managed our cost base and expanded our geographic footprint.”
Nonetheless, Dippenaar points out that the diamond industry, as a whole, has experienced extremely tough trading conditions over the past couple of months.
“We saw significant declines in diamond prices toregistration of stone crusher plantwards the end of last year and at the beginning of this year. Average rough diamond prices fell by up to 65% between September 2008 and early 2009. However, the company has since experienced a general price recovery in the region of 25%, in line with the improvements noted in the diamond market.
“At the moment, the company is cautiously optimistic and is prepared for fluctuating market conditions. Petra will remain in healthy shape to weather these turmoiled times, even if recovery of the diamond market takes longer than expected.”
Dippenaar says that Petra has a history of extremely cost- effective horizontal shaft impact crusher zenithmining methods and operations. “Our cost structures have always been effective, which, obviously, stood us in good stead to see these tough times through.”
During the year ended June 2009, Petra recorded a mine gross revenue of $94,4-million, a 22,1% increase on figures for the previous year. Notably, in sales for the year, two blue diamonds fetched $8,8-million and $9,4-million.
The company’s net increase in production and sales was largely owing to the coming on stream of the Cullinan mine, near Pretoria, in July 2008, and the Tanzania-based Williamson mine, in November.
This, however, was ofgold ore crusher suppliersfset by the fall in diamond prices across all operations in line with market conditions, and the company, accordingly, reduced production at the Koffiefontein mine and at the Star/Helam project.
Dippenaar says that, in terms of turnover and production, Helam and Star are the smallest two of the company’s operations, which is why the company decided to downscale on these two projects. “However, the rest of the operations are now con- tinuing as normal,” he adds.
Further, Dippenaar says that there are positive signs that demand for rough diamonds and, more specifically, liquidity, is improving. The company reports that its rough diamondgold mining equipment brazil tenders “have remained well attended” and all parcels offered for sale have been sold, despite the difficult circumstances over the last nine months.
“Trading conditions remain challenging and our cash flow remains tight, with the recent strengthening of the rand absorbing much of the benefit of the increase in rough prices.
“We sell in dollars, which means that a stronger rand brings with it less rand revenue and this, consequently, has a negative impact on profits. However, if the dollar remains under pressure, one will gene- rally see commodity prices increase. At the end of the day, it more or less balances out,” he sayseized mining equipment for sale in indias.
Meanwhile, the company expects the acquisition of the Kimberley Underground mines to be completed in the near future, says Dippenaar. The agreement to acquire the mines from De Beers was signed in September 2007.
“It has been a complicated transaction to complete owing to the specifics of the mining rights conversion and related matters, but the care-and-maintenance period is allowing Petra to be fully prepared to ramp up production from the point of completion.
“Material hoisted during the care-and-maintenance period has been stockpiled and awaits treatment when the new plant is commissioned. A new treatment plant has been constructed and trial runs will be conducted during July.”
On further acquisitions and mergers, Dippenaar says that, for the time being, the company is focusing on its current operations. “The company owns extremely high quality assets. Over the last six to nine months, we have built up one of the largest reserves and resources of diamonds outside of De Beers. Nonetheless, Petra is always considering the different options available to it, but caution is the word for the time being,” he comments.
“Cautious optimism is at the forefront of Petra’s thinking and, while we remain aware that a softening in prices is possible, we expect prices to continue to slowly and gradually strengthen,” Dippenaar concludes.