Letšeng’s diamonds defy Covid-19 

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Bereng Mpaki

THE average price of Letšeng mine’s rough diamonds increased during the first half of 2021 despite the Covid-19 induced global economic slowdown.

This is reflected in Gem Diamonds’ half year performance report for the six months to June 2021.

Gem Diamonds is the majority shareholder (70 percent) in Letšeng Diamonds, the owner of Letšeng mine. The government owns the remaining 30 percent.

Letšeng mine is the highest dollar per carat kimberlite diamond mine in the world.

In its half-year report released last week, Gem Diamonds said Letšeng mine achieved an average price of US$1886 per carat during the period under review, compared to US$1707 per carat achieved during the first half of 2020.

The report said the highest price per carat achieved during the period was US$119 886 for a 3, 35-carat pink diamond.

The company also recovered a high-quality white diamond which sold for US$40 139 per carat.

Commenting on the performance, Gem Diamonds chief executive officer, Clifford Elphick, said they were pleased with the market resilience demonstrated by Letšeng’s diamonds.

“We are pleased with the results achieved during the period and to see a continued strong demand for Letšeng’s high quality diamonds and the positive impact on prices achieved,” Mr Elphick said.

The company is stringently applying a wide range of Covid-19 protocols, health and safety measures and other precautions to protect employees and contractors at its operations, he said.

“The stringent Covid-19 protocols implemented at Letšeng have contained infections and allowed operations to continue in a safe and responsible manner. The vaccine rollout at Letšeng is progressing well and we hope to have the full workforce vaccinated within the next few weeks,” Mr Elphick said.

Gem Diamonds had managed to operate at normal levels despite challenges presented by Covid 19.  The firm had contended with the d “numerous challenges” relating to “the availability of spares and limited access to certain skills and services due to lockdowns and travel restrictions; as well as a high rainfall season which impacted both mining and treatment activities”.

Despite the challenges, 10, 2 million tonnes of waste were mined at Letšeng during the period compared to the 5, 2 million mined during the corresponding period in 2020.

The mine treated three million tonnes of ore during the period up from 2, 4 million tonnes in the same period last year. The mine’s production metrics stayed on track after recovering 58 831 carats up from 43 275 in 2020.

“The (Gem Diamonds) group increased revenue by 50 percent to US$104, 5 million, compared to the same period in 2020, achieving an average of US$1886 per carat compared to US$1707 per carat in 2020.

The underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) from continuing operations improved by 207 percent to US$34, 7 million compared to US$11, 3 million in 2020, with attributable profit of US$9, 3 million compared to a loss of US$1, 7 million in 2020.”

The report said Letšeng had partnered with the government in increasing preparedness for the impact of Covid-19 in project-affected communities. The mine had contributed 20 000 doses of the Johnson & Johnson vaccine for the government’s national rollout programme.

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