Petra detects diamond price recovery

I-Net Bridge | Wed, 13 Jan 2010 17:47
[miningmx.com] -- PETRA Diamonds, the AIM-listed diamond producer, posted a strong improvement in diamond prices for the six months to December. India and China continued to expand which had helped to take up slack caused by the weaker US and European markets, Petra said. But analysts recently reported a rise in pre-Christmas sales of jewellery in the US, still the largest and most influential jewellery market in the world, as well as a rise in US consumer confidence. This boded well for the rough diamond market in 2010. "Crucially, confidence has returned to the rough diamond market, with financing now beginning to open again to the pipeline," the company said in its diamond market update. The second half of 2009 saw the return of many cautious participants to the market and Petra noted a strong increase in attendance at it tenders. "Certainly levels of competition for rough diamonds are now much closer to normal levels and serve to underpin the stability of the market," Petra said. The diamond market was in a much stronger position as retailers and cutting centres will soon need to replenish their inventories in order to satisfy increased demand as global economic recovery continues, Petra said. Petra reported a 43% increase in group mine revenue to $48.2m in the six months from $33.8m in the previous year owing to higher prices. Some 572,227 carats (gross) were sold, an increase of 55% on the carats sold in the corresponding period of the previous financial year. The company said it was on track to achieve its production target of 1.2 million carats for the 2010 financial year, representing a year-on-year 9.2% improvement. "Petra's current expansion plan will take production to over 3 million carats per annum by 2019," the company said.