‘We believe actions taken by major producers to curb supply will assist in bringing stability and support to the market’
RICHARD Duffy has to be a worried man. The reason is that it’s all going to hell on his watch, again. The diamond market is turning down and Petra is back in the smelly stuff, caught between declining revenues and commitments to hefty capital expenditure programmes. The good news is that Duffy has learnt from his previous bitter experiences and is doing something about the situation immediately instead of merely hoping for the best as he did before.
He took over Petra in 2019 when the company was up to its eyeballs in debt, but Duffy had hoped an improving diamond market would see the company through its looming financial crunch. Covid-19 clobbered that one, resulting eventually in Petra holding a major restructuring of its loans through which its creditors ended up with 91% of the stock. Duffy then turned bullish on the diamond market again declaring in February 2022 that a major structural change was taking place where the “long-predicted supply squeeze is being reflected over all the diamond categories”. If only. The market has turned down sharply – yet again – and Duffy has reacted by deferring $65m in capital extension programmes, meaning that Petra’s production is going to drop by an as-yet unspecified amount over the next three years instead of ramping up by around 1.3 million carats.
If there’s an underlying thread in all this, it is the relentless optimism of the diamond producers about favourable “long-term prospects” for the diamond market. De Beers has been singing from this hymn sheet since the days of Sir Ernest Oppenheimer. Time and time again this optimism has been shown to be misplaced. De Beers has Anglo to back it, but Petra is on its own.
LIFE OF RICHARD
He has a mining engineering degree from the University of Nottingham and an MBA from the London Business School. Prior to taking over Petra he spent most of his career with Anglo American and then AngloGold Ashanti where he became chief financial officer. His time as CEO at Petra has been a baptism by fire, where just about everything that could go wrong with the company – tailings dam collapses, financial implosions, full-scale confrontations with the Tanzanian government – has gone wrong. It’s a measure of his resilience that he has coped so far.