Petra on track to achieve target

2010-01-13 13:43

Petra Diamonds said on Wednesday it was on track to achieve its

production target of 1.2 million carats for the 2010 financial year.

In a trading update for the six months ended December 31, it said

sales were up 43% and production up 12% compared to the six months to December

2008.

“Longer term, Petra’s current expansion plan will take production

to over 3 million carats per annum by 2019,” the company said.

Chief executive Johan Dippenaar said the rough diamond market had

recovered significantly in the period under review, “as evidenced by the

increase in prices reported by Petra and other significant producers”.

Dippenaar said the emerging consumer markets of India and China had

continued to expand and helped to take up the slack caused by the weaker US and

European markets.

“However, analysts recently reported a rise in pre-Christmas sales

of jewellery in the US, still the largest and most influential jewellery market

in the world, as well as a rise in US consumer confidence, boding well for the

rough diamond market for 2010,” he said.

Crucially, confidence had returned to the rough diamond market,

with financing beginning to open again to the pipeline.

He said the second half of last year saw the return of many of the

more cautious participants to the market and Petra had noted a strong increase

in attendance at its tenders.

“Certainly levels of competition for rough diamonds are now much

closer to normal levels and serve to underpin the stability of the

market.”

Dippenaar saw the market as being in a much stronger position this

year, “particularly given that retailers and cutting centres will soon need to

replenish their inventories in order to satisfy increased demand as global

economic recovery continues”.

Petra is listed on the AIM market of the London Stock

Exchange.

In South Africa the company has interests in five producing mines -

Cullinan, Koffiefontein, Helam, Sedibeng and Star - and has also agreed to

acquire the Kimberley Underground mines from De Beers. This acquisition is

expected to complete soon.

In Tanzania, Petra has an interest in the Williamson mine.

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