GEM Diamonds increased production guidance for its 2024 financial year to between 98,000 and 101,000 carats while sales increased to a forecast 100,000 to 103,000 carats.
Commenting in its half year results announcement today, the UK-listed firm said optimisation efforts from its Letšeng mine in Lesotho was behind the improvement which had also helped reduce the impact of poor diamond market conditions.
“The pressure on the global diamond market persists which negatively impacted the revenue generated during the period,” said Clifford Elphick, CEO of Gem Diamonds. “We have, however, had great success in improving our operational outputs and cost containment which mitigated the market impact on diamond prices,” he added.
Some 55,873 carats were recovered from Letšeng during the half year which compares to production of 50,601 carats a year earlier. The average value of carats achieved was $1,366 per carat compared to $1,373/carat at the midpoint of 2023.
An increase in both the number of larger than 100 carat diamonds and overall diamond recoveries aided in offsetting the market impact on prices, said GEM.
Diamond miners globally have been thrown back on their heels by the continued slump in China’s economy which has reduced demand for diamonds.
In July, De Beers cut its full year production guidance by three million carats to between 23 and 26 million carats (previously 26–29 million carats) amid signs weaker demand “is expected to continue for some time”.
In April, De Beers chopped its rough diamond production forecast for 2024 by 10% dropping it to between 26 and 29 million carats from the previous estimate of 29 to 32 million carats.
Petra Diamonds, which operates mostly in South Africa, recently recapitalised its balance sheet as it juggled resource replenishment with difficult market conditions. “We expect a subdued market through to the end of this calendar year,” said Richard Duffy, CEO of Petra Diamonds last month.
Morgan Stanley commented in a report in June that polished natural diamonds were “in a downward spiral with little evidence that prices are at an inflection point”.
