South Africa: Petra Diamonds delays Cullinan Mine tender amid US tariff uncertainty
The company, as part of its periodic tenders, had already sold diamonds from its Finsch mine, also in South Africa, and its Williamson mine in Tanzania before U.S. President Donald Trump unleashed a barrage of tariffs last week.
WHY IT'S IMPORTANT
These tariffs, applicable on U.S. imports ranging from dental floss to diamonds, have left companies globally scrambling to rethink their business and sparked concerns of a trade war that would stunt economic growth.
South Africa is one of the biggest exporters of diamonds to the United States, along with India.
CONTEXT
Petra, already 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 been producing fewer high-quality diamonds recently.
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.
KEY QUOTE(S)
"The U.S. tariffs announcement late last week has resulted in considerable diamond market uncertainty," the diamond miner said.
BY THE NUMBERS
Petra sold 176,000 carats in gems from its Finsch and Williamson mines for a total of $18 million 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 $103 million in sales overall from the first five tenders this year, a 25% drop from the $138 million it made in the first five tenders last year.
MARKET REACTION
Petra's shares fell 6.1% to 26.3 pence in early trading. (Reporting by Yamini Kalia in Bengaluru; Editing by Savio D'Souza)
Reuters
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