UK Markets close in 2 hrs 35 mins

Diamond miner Petra’s shares sink on weaker prices

By Henry Saker-Clark, PA City Reporter

Petra Diamonds shares have dived after the company saw first-half revenues slide by 6%.

The company was hit by lower prices as the diamond industry continues to tackle weak demand from China amid trade tensions with the US and political unrest in Hong Kong.

Petra said it saw increased price stability towards the end of the period and that demand has “continued to improve” in the current period.

The Africa-focused miner added that it will meet or exceed full-year production guidance after unearthing record high volumes of diamonds.

It said production increased by 3% to 2,070,240 carats for the six-month period to December 31.

Management said the firm’s Project 2022 operational improvement programme has now been extended to all of its mines, driving the improvement in production.

The debt-laden business said its net cash position decreased to 53.6 million US dollars (£41 million) while its consolidated net debt was roughly flat at 632.9 million dollars (£484 million).

Petra hailed sales of the exceptional blue diamond from its flagship Cullinan mine, but said this was offset by price decline and poor quality diamonds from its Finsch mine in South Africa.

Chief executive Richard Duffy said: “I am very pleased with the progress made in implementing Project 2022 across our operations and at corporate level.

“It is also encouraging that rough diamond pricing has modestly improved moving into our third quarter.

“The health of the market will depend on continued supply discipline from the majors as well as macro-economic conditions.”

Shares in the business sank 10% to 9.6p in early trading on Monday.