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Indian Slowdown Dents Mountain Province

Weaker rupee and low seasonal demand lead to drop.
Oct 22, 2018 6:01 AM   By Rapaport News
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 Mountain Province’s sales dropped at its October tender amid a weaker Indian market, the miner said last week.

The company sold 366,505 carats of rough diamonds from its Gahcho Kué mine for $24.2 million, at an average price of $66 per carat. It noted price declines for smaller and lower-quality diamonds in the mid-single-digit percentages.

“We believe the price pressure is predominantly driven by the recent rapid weakening of the Indian rupee against the US dollar and, to some extent, the seasonal lower demand for rough diamonds ahead of the Diwali celebrations,” the miner said.

In September, Mountain Province garnered $26.9 million, achieving $65 per carat. That figure included the sale of special-size stones — those above 10.8 carats — which Mountain Province won the right to sell for that month. Mountain Province and De Beers, its partner in Gahcho Kué, bid to sell large stones and fancy-color diamonds from each cycle of production.

“The eighth sale of the year…was a good result considering the current market and time of the year, and we did well to sell all our categories at current best market prices,” said Mountain Province CEO Stuart Brown.

Consumer demand for diamond jewelry is strong in both the US and Chinese markets, boding well for the company as it heads into the holiday seasons in those countries, Brown explained.

“We are encouraged to see positive diamond-jewelry retail sales, and we believe that with a positive retail selling season we will see better demand for rough diamonds in the near future,” the executive added.

Image: Gahcho Kué mine. (Mountain Province)
Tags: De Beers, Diwali, Gahcho Kué, mountain province, Rapaport News, stuart brown
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