Petra Diamonds Posts Heavy Loss

RAPAPORT... Petra Diamonds saw a significant loss in the first fiscalhalf, impacted by several factors including a blocked diamond parcel andthe effects of a stronger rand, the company said Monday.The net loss came to $117.7 million for the six-month periodending December 31, while profit from mining activities slipped 7% to $85.6million.The miner suffered a $118 million impairment charge - apermanent reduction in the value of an asset - at its Koffiefontein and Kimberley operations in South Africa. The stronger South African rand resulted in higher costs at these mines, slashing the value of those assets.Sales were affected by the Tanzanian government's seizure of a parcel of 71,654carats from the Williamson mine. Those rough stones are currently in the hands of the government, Petra said. First-quarter strikes at some ofits South African operations also dented profit, the company added."Our focus now is to keep on delivering from the newproduction blocks, particularly at Finsch and Cullinan, where the expansionprograms continue to ramp up, and to further optimize the new Cullinan plant,"said CEO Johan Dippenaar (pictured). "The challenge of the strong rand has also sharpenedfocus on our operating and capital expenses."  Despite a 1% drop in revenue for the first half to $225.2million, Petra expects to meet analysts' expectations for the full fiscal year's sales. The company has signeda three-year wage agreement that has put an end to labor strikes, and expects to be able to sell the confiscated parcel before the end of June. Additionally, like-for-like diamond prices were up 3% to 4% at the first tender of thesecond fiscal half.The performance of the rand will continue to affect Petra's financial position, it added. A stronger local currency results in higher expenses in dollar terms. Petra operates the Cullinan, Finsch andKoffiefontein underground mines in South Africa, the Williamson open-pit facilityin Tanzania, and a joint venture with Ekapa Mining at the Kimberley deposit, alsoin South Africa. Image: Petra Diamonds CEO Johan Dippenaar holding the 122.52-carat Cullinan Dream. Credit: Petra Diamonds