PETRA Diamonds said revenue increased 38% to $406.9m for the year ended June 30 despite mining fewer stones from its South African operations.
It mined 3.24 million carats during the 12 months including 1.94 million carats from its Cullinan mine – a company record – which compares to 3.59 million carats last year. The decline was owing to lower production at Finsch and Koffiefontein.
The Williamson mine in Tanzania, Petra’s only mine outside South Africa, is currently on care and maintenance following the dip in the diamond market last year. Discussions regarding its reopening are underway with the Tanzanian government, said Petra which continues to report incursions by illegal miners.
The improvement in revenue was partly owing to the relatively large proportion of so-called ‘exceptional stones’, diamonds with a value of $5m or more. But the market had also revived, a process that was underway from late last year driven by strong retail demand in the US and China.
Petra said demand for rough diamonds was expected to remain robust in the second half of the 2021 calendar year as retailers were anticipating continued strong consumer demand. Post period, Petra sold a large stone discovered at its Cullinan mine for $40m.
Petra’s 2021 financial year proved to be the company’s most difficult. The slump in the diamond market and disappointing production numbers, coupled with the operational and market disruptions created by the Covid-19 pandemic, saw debt spiral out of control.
It subsequently converted half of an outstanding loan note to shares equal to some 91% of the firm’s enlarged share capital.
It said today that net debt had been reduced to $241.2m as of June 30 from $290.7m end-March. Net debt totalled $693.2m as of June 30, 2020.
Commenting on the reopening of Williamson, Petra said it hoped to finalise the details in the current first quarter of its 2022 financial year.
Williamson continues to give Petra headaches, however. In May, the company paid £4.3m in settlement of claims brought against the mine related to human rights abuses perpetrated by a third party security company hired by the miner. According to Leigh Day, the UK attorney, 71 individuals alleged that they suffered serious human rights abuses by security personnel employed by Petra.
Petra said today that during the final quarter of the 2021 financial year, there were 109 incidents of illegal incursions onto the Williamson mine lease area. This resulted in three illegal diggers suffering minor injuries.
“We believe the contracted security teams and Tanzanian police acted in accordance with the Voluntary Principles on Security and Human Rights,” said Petra. “There was some damage caused to police and contracted security provider vehicles in five of the incidents. A total of 18 arrests were made over this three-month period,” it said.
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