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Petra Diamonds’ production up but diamond prices slump

Petra Diamonds has reported an increase in production but a fall in diamond prices in its trading update for the period July 1 to October 27.

In its first quarter results for 2016, Petra reported no revenues as its first diamond sale of the financial year was not until October but said diamond prices on a like-for-like basis were down 8.8% compared with the fourth quarter of 2015 in US dollar terms.

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Despite this, production rose 1% to 842,796 carats, a record level of quarterly production for the group. Petra said it remains on track for its expected 3.3m to 3.4m carats for the full year.

In a statement on the market, the company said: “The diamond market continues to be impacted by excess polished inventory in the pipeline, a slowdown in demand (particularly from China), as well as financing and profitability issues in the midstream.”

Johan Dippenaar, CEO, said: “Petra’s focus remains on the maintenance of a healthy balance sheet, the tight control of costs, and the successful roll-out of our expansion plans, which will deliver the first significant input from the higher quality production areas from H2 FY 2016 onwards.”

He added that these measures will help the company to withstand “uncertain market conditions”.

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