GEM Diamonds said it had replaced a tender for its large diamonds with a “flexible direct sale process” in mitigation of travel bans on buyers.
The company said in an announcement today that the large diamond tender for goods produced by its Letseng mine in Lesotho was due to have closed on March 25. The tender had now been cancelled followed travel bans on Belgium nationals and nationals of other governments as a result of the COVID-19 pandemic.
Viewings held to date in terms of the direct sales process had been “significant”, but any unsold diamonds would be held over to the next tender, the company said.
GEM Diamonds needs a strong showing for its larger diamonds – for which Letseng has world renown – following an 18% decline in average prices for small diamonds following the end of a tender in Antwerp on March 18. The tender realised $7.8m.
“The results of the Letseng small diamond tender are resilient given the difficult circumstances under which the tender was held caused by the ongoing Covid19 situation,” said Clifford Elphick, CEO of GEM Diamonds.
Commenting on March 11, ahead of its tenders, Elphick said that: “We have a tender coming up in two weeks and we have not seen any cancellations that give us cause for concern. But we will see how it translates into price. I would not be surprised if there was some impact given the loss of confidence and the impact of the unknown.”
Elphick was commenting during the presentation of the London-listed firm’s 2019 annual financial results in which lower grade from its satellite pipe of the Letseng mine in Lesotho and lower selling prices – the average price achieved decreased 23% to $1,637 per carat – resulted in lower revenue and a decline in share earnings.
Bloomberg News reported on March 17 that De Beers intended to press ahead with its next round of diamond sales planned for March 30 despite buyers being prevented from inspecting the goods owing to travel bans on nationals from China, India and Belgium.
Citing a De Beers statement, Bloomberg News said: “Our intention remains to hold the sight, in line with the desire for it go ahead expressed by customers, but we are developing a suite of contingency plans in the event that it is not possible to hold the sight in the usual manner”.
These plans could include having local representatives of buyers attend the sight or by holding a “blind sight” in which buyers don’t see the goods they are buying.
GEM Diamonds also said Letseng remained “in full production” as there had been no reported cases of COVID-19 at any of its facilities.
