Johannesburg. Rough diamond prices were lower in the final months of 2011, as economic uncertainty, caused by the eurozone crisis, continued to take its toll.

London-listed Gem Diamonds reported last week that the average value of its fourth-quarter Letšeng sales was 23 per cent weaker on a year-on-year basis, with the company achieving $2,543/ct, down from $3,291/ct in the same quarter of 2010.

“The fourth quarter of 2011 saw rough diamond prices down from their highs in the first half of the year due, in the main, to the continuing effects of the eurozone crisis,” said CEO Clifford Elphick.

He added, however, that the last two Letšeng tenders of the year saw an improvement in demand, with a modest strengthening of prices in most categories.

After a sharp drop at the end of the third quarter, diamond prices for the less than 10.8 ct diamonds recovered by 4 per cent across the board in the fourth quarter, with the better quality, less than 10.8 ct diamonds recovering by 8 per cent on average.

While the exceptional, larger Letšeng diamonds were not as severely impacted as the smaller diamonds were in the third quarter, they also only showed single-digit price improvements in the fourth quarter.

The polished market, however, remained under pressure and Letšeng-type polished prices were 5 per cent to 10 per cent softer in the final quarter of the year. This compares to a 20 per cent to 25 per cent decline across the industry.
Gem Diamonds realised $82.3 million from the sale of 32,353 ct during the quarter, up 2 per cent from $80.7 million achieved in the fourth quarter of 2010 when it sold 24,517 ct.

For the full year, it sold 107,700 ct and made $299 million, compared with selling 88,564 ct and $190.3 million in 2010.

Meanwhile, Gem Diamonds said Letšeng continued its strong operational performance, ending 2011 with the highest carat recovery in the history of the mine.  (miningweekly.com)

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