Petra Diamonds Reviews Capex and Considers Finsch Mine Suspension Amid Weak Diamond Prices and Rising Debt
London-listed Petra Diamonds has launched an urgent review of costs and capital expenditure (capex) across its operations as it moves to protect liquidity amid sustained pricing pressure in the global diamond market.
The company is also considering suspending further capex at its Finsch mine in South Africa due to escalating cost pressures.
In its operational update for the quarter ended March 31, the third quarter of Petra’s 2026 financial year, the group reported sales of US$68 million, boosted by the sale of a 41.82-carat Type IIb blue diamond.
However, overall pricing remains under pressure, particularly in smaller diamond size categories across its product mix.
The company also said rough diamond tenders were affected by logistical disruptions linked to geopolitical tensions in the Middle East, which constrained travel and market participation during the period.
Foreign exchange movements added further pressure, with the South African rand strengthening to an average of R16.34 against the US dollar, reducing cash flow generation in dollar terms.
As a result, net debt increased to US$298 million at the end of the quarter, up from US$284 million at the end of December 2025. Petra’s revolving credit facility is currently fully drawn.
The group confirmed that it is conducting a detailed financial assessment of the Finsch mine, with a decision expected during May.
The review will determine whether additional cost reductions or operational adjustments are required, including the possibility of scaling back or suspending capital investment at the asset.
Petra cautioned that the review process may take longer than initially anticipated depending on financial and operational outcomes.
At the company’s Cullinan mine in South Africa, Petra has suspended full-year production guidance as it revises its operating plans.
The company said it does not expect to meet previously issued annual carat production targets.
Interim joint CEOs Vivek Gadodia and Juan Kemp said the group is prioritising operational flexibility, cost optimisation, and liquidity preservation while maintaining long-term production resilience.
At Cullinan, operational focus has shifted toward maximising output from high-value areas of the orebody, particularly the Eastern sections of the C-Cut, which are known for producing Type II diamonds. This strategy is intended to offset weaker pricing in lower-value size categories.
The company also said it is reassessing the appropriate capital investment profile for Cullinan to balance short-term financial stability with long-term production sustainability.
Despite financial pressures, Petra reported stable operational performance during the quarter.
The Finsch mine largely met production expectations, while Cullinan continued to recover from earlier weather-related disruptions.
Total ore processed declined by 4% quarter-on-quarter to 1.5 million tonnes, primarily due to power interruptions at Cullinan caused by severe weather, as well as deteriorating underground road conditions linked to water ingress, which affected equipment availability and reliability.
At Finsch, run-of-mine grades continued to improve, providing some operational support amid broader market and financial challenges facing the group.
