Diamond Juniors May Not Survive Low Diamond Prices
February 11, 19
(IDEX Online) – At a Global Diamond Roundtable held earlier this month during the Investing in Africa Mining Indaba, participants discussed the fall in prices of lower quality, cheaper diamonds and indicated that if this situation is to continue, the so-called diamond juniors may not survive the onslaught, unless there is a positive turnaround in the market.
Firestone Diamonds CEO Paul Bosma told the round table participants that his mine is currently averaging production of just $75 per carat but that the financial planning for the mine foresaw a revenue of $107 per carat. “Diamond prices have taken a big dip since 2013 when we valued the diamonds and this is affecting everyone,” he told the forum.
Bosma said that “for now, we are OK … not great … but OK. The situation is so sensitive to the diamond price. At $85/carat our cash position doubles. If the price sticks at $75/carat for another two years then ourselves, Petra Diamonds, Stornoway and Mountain Province are all going to be in deep trouble because we all have debt and we are all just surviving at current prices.”