Petra Postpones 380,000-cts Tender amid Midstream Slowdown

By John Jeffay / June 07, 2023 / www.idexonline.com / Article Link

(IDEX Online) -  Petra Diamonds today said it had postponed its June tender of 380,000 carats, in a further indication of a midstream slowdown.The UK-based miner reported a sharp drop in sales at its May tender - down 42 per cent on its March sale - and withdrew almost 76,000 predominantly high-value carats because of weak demand.Petra says it now plans to offer both the goods from its June tender, and the withdrawn diamonds from its May tender in August.Two weeks ago Richard Duffy, Petra's CEO, blamed softer demand on high inventory levels and and extended shutdowns for Indian holidays. "Demand is expected to improve and the withdrawn parcels will be offered for sale at Petra's Antwerp facilities during May and June 2023," he said.The fact the withdrawn diamonds will not now be offered until August suggests the markets are not recovering as expected.In a statement release today he said: "In light of what we expect to be a temporary slowdown in the market for rough diamonds as a result of elevated inventory in the mid-stream, we have taken the decision to postpone the majority of our Tender 6 rough diamond sales. "Our ability to be flexible in the timing of our tenders is attributable to our strengthened balance sheet and the resilience of our business. This will defer sales revenues for only a relatively short period and we believe it is in the best interests of the business and shareholders."Petra had planned to sell around 230,000 carats from its Cullinan Mine and 150,000 from Finsch, both in South Africa.Its Williamson deposit, in Tanzania, remains out of action after the breach of a tailings dam and loss-making Koffiefontein, in South Africa, is being closed for good.The deferral of Petra sales to FY 2024 will impact Petra's revenues and financial results. The company said it was confident that the delay was in the best interests of the business and was manageable without having to draw on its $52m revolving credit facility.File pic from a Petra tender

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