Petra Diamonds, which has the world’s third-largest resource of diamonds, said on Wednesday it had delayed the sale of gems from its Cullinan mine, east of Pretoria, until there was greater clarity around the impact of US tariffs.
The company, as part of its periodic tenders, had sold diamonds from its Finsch mine, also in SA, and its Williamson mine in Tanzania before US President Donald Trump unleashed a barrage of tariffs last week.
The tariffs, applicable on US imports ranging from dental floss to diamonds, have left companies globally scrambling to rethink their businesses and sparked concerns of a trade war that would stunt economic growth.
SA is one of the biggest exporters of diamonds to the US, along with India.
Petra, struggling with widening losses due to prolonged weakness in the diamond market, is in the midst of a restructuring plan.
Moreover, the iconic Cullinan mine, from where the largest ever gem-quality diamond was recovered 120 years ago, has recently been producing fewer high-quality diamonds. That has added to Petra’s woes when it enters the market to sell diamonds via tenders, which are timed around specific calendar events and to fit with other regional diamond sales.
“The US tariffs announcement late last week has resulted in considerable diamond market uncertainty,” the diamond miner said.
Petra sold 176,000 carats in gems from its Finsch and Williamson mines for a total of $18m (R356m) in its fifth tender this year, a 9% jump in average price from the fourth tender. That was despite withdrawing about 200,000 carats of Cullinan material from the latest tender.
However, it has made $103m (R2.03bn) in sales overall from the first five tenders this year, a 25% drop from the $138m (R2.7bn) it made in the first five tenders last year.
Petra’s shares fell 6.1% to 26.3 pence (R6.53) in early trading.
Reuters
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