A lovely springtime sun is warming up the Antwerp diamond square mile, boosting temperatures from snowy below zero barely a week ago to a pleasant 15°Celcius. The weather is echoing the sentiment on the market and at Petra Diamonds, as both have emerged from tough times probably stronger than before.
Since the outbreak of the pandemic in March last year, Petra Diamonds was one of the first to shift gears as the world was paralyzed. The Johannesburg sales were put on hold and the miner started focusing its sales on Antwerp, where operations continued despite global lockdowns.
Petra’s Antwerp office, completely set up with signage queues and walking directions, screens and hand sanitizer stations every few meters, is full of life as Petra’s experts check and control rows of bags filled with rough diamonds, all sorted neatly, in a seemingly endless range of sizes and qualities, the so-called run-of-mine or original productions, from Petra’s Cullinan, Finsch and Koffiefontein mining operations.
And even though the parcels of rough diamonds, rustling softly as they are spread out carefully on the typical, white paper sorting pad, are a feast for the eyes, Petra’s specials in this sale are the real stars. You can tell Greg Stephenson, Group Head Sales & Marketing at Petra Diamonds, is smiling behind his face mask, as he shows a massive and magnificent, 299ct type IIa, clear white diamond recovered at the Cullinan mine alongside two vivid yellow octahedrons and a smaller but equally promising blue rough diamond, just a few of the more than 100 specials Petra is putting up for sale this week.
The viewing, which lasts about a week, is fully booked, with a significant number of clients on a waiting list, all hoping a spot will open up to come and look at the rough before deciding to bid or not. Stephenson agrees that technology has evolved significantly in the past years, with scanning technology that can map stones and their inclusions in detail, but buying and selling rough remains, to a large degree, a business where people want to see, and more importantly, feel the goods.
Typically, a miner will make assortments of rough diamonds they have mined, providing clients consistency and a level of predictability in the prepared parcels, but even then, and especially for larger diamonds and fancy colored stones, one buyer’s assessment of a parcel or particular stone, and thus the price he or she is willing to pay, can be very different from another bidder. Diamonds are a product of nature and (head-)strong in every respect, as experienced polishers will tell you, for all the technology in the world, in a certain sense, the stone itself has the final say in what will happen to it next, not necessarily the computer models.
The pandemic has been tough on miners across the board, and Petra is no exception. National lockdowns forced miners to temporarily put their mines on care and maintenance and they had to think on their feet to weather the Covid storm. And despite the ongoing uncertainties and volatility on a global level, Petra Diamonds is finally seeing light at the end of the tunnel. The miner initiated a capital restructuring in October last year and is expected to finalize a debt for equity deal next month, with its Noteholders, with the support of the South African Lender Group and the BEE partners. In a recent update, Petra Diamonds also reported a profit in H1 FY 2021 (the six months ending on December 31 2020) of US$2.7m, as operational costs were reduced significantly. Prices at the first sales of 2021 went above pre-pandemic levels (January 2020 levels) and Petra managed to successfully sell the Letlapa Tala collection of five exquisite blue rough stones. Although challenges remain, the Williamson mine in Tanzania remains on care and maintenance and record rainfall is impacting the Koffiefontein and Finsch operations, Petra has good reasons to be cautiously optimistic and hope, as the proverb goes, that after rain comes sunshine.