Petra Diamonds has postponed its sixth tender for the financial year (FY) 2023 due to a temporary downturn in the market for rough diamonds.
The miner said the diamonds originally earmarked for sale in June will now be tendered in August, which historically coincides with stronger demand due to the end of Northern Hemisphere summer holidays and the commencement of manufacturing orders being filled ahead of the seasonally strong end of year festive period.
The June tender would have offered about 230,000 carats of goods for sale from the Cullinan Mine and 150 000 carats from Finsch.
The other goods that would be offered in August, Petra’s first tender for FY 2024, include the 76,000 carats of predominantly higher-value stones withheld from the fifth as well as run of mine production from both South African mines.
Petra said it is confident that the deferral of sales revenues for a relatively short period of time is in the best interests of the business and is manageable from a liquidity perspective without having to draw on its R1 billion ($52 million) revolving credit facility.
“In light of what we expect to be a temporary slowdown in the market for rough diamonds as a result of elevated inventory in the midstream, we have taken the decision to postpone the majority of our tender 6 rough diamond sales,” said company chief executive Richard Duffy.
“Our ability to be flexible in the timing of our tenders is attributable to our strengthened balance sheet and the resilience of our business.
This will defer sales revenues for only a relatively short period and we believe it is in the best interests of the business and shareholders.”
