Gem Diamonds’ Letšeng Mine Boosts First-Half Sales Value 33% to $59.5 Million Despite Lower Output
London-listed Gem Diamonds recorded a 33% year-on-year increase in diamond sales value to $59.5 million in the first half of the year, despite a decline in recovered carats.
The company recovered 41,695 carats during the six months to June 30, representing a 12% decrease compared with the same period last year.
Diamond sales volumes also declined by 4% year on year to 42,624 carats. However, the average price achieved increased significantly by 38% to $1,395 per carat, driving the strong growth in sales value.
Gem Diamonds CEO Clifford Elphick said market prices for lower-quality and smaller rough diamonds remained under severe pressure from the growing availability of synthetic diamonds.
He noted that the challenging market conditions had prompted several mines producing diamonds of similar size and quality to suspend operations.
However, Gem Diamonds’ Letšeng mine in Lesotho has been more resilient because of its exceptional diamond quality and track record of recovering large stones.
“Letšeng, with its exceptional quality and large diamond recoveries, has been less impacted, with encouragingly strong demand leading to an improvement in prices during the first half of the year,” Elphick said.
Gem Diamonds owns a 70% interest in the Letšeng mine, which is renowned for producing high-value, large diamonds.
The company said first-half production was primarily sourced from the lower-grade, lower-value Main Pipe, with a smaller contribution from the higher-grade and higher-value Satellite Pipe, in line with the mine plan.
The mining sequence resulted in a lower overall grade and consequently reduced carat recoveries during the period.
For the remainder of the year, production will come exclusively from the Main Pipe as the company prepares for the next cutback at the Satellite Pipe.
Despite lower production volumes, the strong increase in average diamond prices highlights the resilience of Letšeng’s high-value production profile amid continued weakness in the market for smaller and lower-quality rough diamonds.
