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Pandemic Punctures Sales at Letšeng Mine

Revenue down 22% as lower volumes outweigh rise in average price.
Jul 30, 2020 8:43 AM   By Rapaport News
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RAPAPORT... Revenue at Gem Diamonds fell in the first half of the year amid a temporary shutdown of its mine and weak demand due to the coronavirus.

Sales of rough diamonds from the Letšeng mine in Lesotho dropped 22% to $74 million by value, and also fell 22% by volume to 43,384 carats in the six months ending June 30, the miner reported Thursday. The average price inched up slightly to $1,707 per carat, compared with $1,697 per carat in the same period a year ago, as the company focused on mining high-value ore from the satellite pipe.

During the period, Gem Diamonds held three tenders, two in the first quarter and one in the second quarter.

“Prices for Letšeng’s diamonds have been impacted by the fallout from the Covid-19 pandemic, but have nonetheless demonstrated a resilience in this global crisis,” the company said. “The latest tender in June included the sale of only the larger diamonds, and the results were positive [considering] the current market environment.”

Production at Letšeng fell 24% to 43,275 carats, as the miner had to stop all work at the site between March 28 and April 26 due to a government-imposed lockdown to curb the spread of the virus.

During the period, the company sold 16 diamonds for more than $1 million each, compared to 12 of that value during the first half a year ago.

One worker at Gem Diamonds’ Johannesburg office has tested positive for the coronavirus and has since recovered, while 74 Letšeng workers went into quarantine after screening indicated they might have the virus. Of those, two have died while in quarantine, but the cause has not yet been confirmed to be coronavirus-related, the miner said.

Gem Diamonds plans to issue a revised forecast for the full year after it assesses the impact of Covid-19 on operations, it added.

Image: An aerial view of the Letšeng mine. (Gem Diamonds)
Tags: COVID-19, Gem Diamonds, Letšeng, Letšeng mine, Rapaport News
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