Rising Rough Prices Protect Gem Diamonds H1 Revenues

(IDEX Online News) – Gem Diamonds reported a decline in diamond production in the first half of 2011. Rising rough diamond prices have however allowed it to nearly double its revenues in the period, backed by extremely strong prices for large, high quality, white and fancy color diamonds the company reported Monday.

Total diamond production declined 17% to 105,147 carats in the January-June period. The miner sold 110,188 carats, a 7% decrease, for $194 million – soaring 84% compared to the first half of 2010.

The average value of the sold production doubled (+98%) to $1,759 p/c.

Gem Diamonds has two producing mines, Letšeng in Lesotho and Ellendale in Australia.

The Letšeng mine achieved a record average value of $3,052 p/c in the period, a 77% increase. Thirty of the rough diamonds sold for more than $1 million

The mine, source of some of the most exceptionally large white diamonds, produced 105 rough diamonds that were valued at more than $20,000 p/c and 295 rough diamonds greater than 10.8 carats in the period.

At Ellendale, production was sliced by more than a third, declining to 52,349 carats. Total sales of the mine’s production, $33 million, a 1% decline.

The achieved prices for Ellendale’s production was improved following an agreement has been reached for a 24.73% price increase for Ellendale’s fancy yellow diamonds, which are sold to Tiffany & Co.

Ellendale achieved a record average price of $4,045 per carat for its fancy yellow diamonds in the six-month period.

“Increasing consumption of diamond jewelry in the US, China and India, the lack of significant new mines coming on stream and very low stocks of rough and polished diamonds in the cutting centers is being reflected in strongly rising prices of both rough and polished diamonds,” said CEO Clifford Elphick.