Petra Diamonds to sell 5 rare blue diamonds as it struggles against Covid-19 downturn

Diamond collectors would be thrilled by the upcoming sale of five blue diamonds from Cullinan Mine in South Africa. The gems were recovered within the space of one week’s production in September 2020

The Letlapa Tala Collection consists of five blue diamonds.

Petra Diamonds, leading diamond mining group, says the Letlapa Tala Collection consisting of five blue diamonds would be sold through a tender process. The sales tender will close on 24 November 2020.

With revenue impacted by lower diamond prices amid a weak economic environment, this has added woes to the troubled company. Its current share price is around £1.40, after plunging this year.

Petra Diamonds announced in June that the company is up for sale. Buyers could either buy parts of the business or assets or the entire company. As yet, no interested buyers have been secured.

Early this week, Petra Diamonds announced its long-term restructuring solution it had reached with lenders, including the Group’s black economic empowerment. Of its US$650 million debt, US$337 million will be new notes, of which R30 million would be debtholders money. In addition, some of the note debt will be converted to equity taking the noteholders stake to 91%, with existing shareholders holding the balance of 9%.

In South Africa, the company owns Finsch, Cullinan and Koffiefontein. The Cullinan mine contributed US$116.5 million in FY 2020, accounting for 39% of Group revenue. It employs more than 1 300 people with over 200 contractors.

Petra Diamonds owns one open pit producing mine, the Williamson in Tanzania, currently on care and maintenance. The company says it is continually evaluating when to can recommence operations, subject to more favourable market conditions.

Its strategy is to focus on value rather than volume production. Petra Diamonds will optimise recoveries from its high-quality asset base in order to maximise efficiency and profitability.

Diamond prices

South Africa’s Cullinan Mine is the world’s most important source of blue diamonds. It was in September 2019 that the last blue diamond of significance was recovered at this mine. “These diamonds are incredibly rare so it’s impossible to predict their frequency.”

The mine has produced historic stones including the two largest diamonds (3,106 and 317 carats) in the British Crown Jewels. Notable diamond sales from Cullinan have achieved prices ranging from US$15 million in 2019 to US$35.3 million in 2010.  In 2015, a 12 carat diamond (cut from a 29 carat rough blue diamond from the Cullinan Mine) fetched US$48.5 million. This represents +US$4 million per carat (US$20 million per gram) – and remains the world record price per carat ever paid for a diamond.

Blue diamonds for sale

Inspired by the predominantly Northern Sotho language spoken in the Cullinan Area, the name means ‘blue rock’. The collection consists of 25.75, 21.25, 17.57, 11.42 and 9.61 carats in size.

It would be difficult to predict what potential buyers would be prepared to pay for the stones. “While we cannot provide guidance, historically achieved sale prices attest to their value.”

Avid diamond buyers can purchase rare and attractive hard asset investments with potential value growth over time.

Viewings open on 25 October -1 November in Antwerp, Hong Kong (5 – 10 November) and New York (16-20 November). Buyers can bid on individual stones or for an entire collection.

(Visited 306 times, 8 visits today)