GEM Diamonds Remain Optimistic for 2023 Despite Share Prices Declining to Lowest Point Over Last Year

Clifford Elphick, CEO of GEM Diamonds said in an announcement on Thursday (March 16) that market volatility caused by the invasion of Ukraine by Russia contributed to a decline in diamond prices. GEM achieved an average selling price of $1,755 per carat compared to $1,835 per carat in 2021. Though he remains overall optimistic regarding the mine’s capacity to rebound during the 2023 fiscal year.

They reported a 31% decline in attributable profit for the 12 months ended December 12 of $10.2m compared to $14.8m in the previous financial year.

On the upside, the reopening of China, the world’s second largest diamond market, boded well for the current financial year, he said.
For 2022, however, it was disruptions to diamond production at Letšeng which hit hardest. Elphick cited electricity interruptions owing to power curtailments implemented by South Africa’s government-owned power utility, Eskom.

Excessive rainfall as well as the Lesotho national elections in October 2022 that required a compulsory two-day site-wide shutdown, and a secondary crusher breakdown were other major contributing factors to the mine’s lower output. Some 106,704 in carats were recovered for the year compared to 115,336 carats in 2021.

Elphick summarized the current situation in the announcement with a positive tone: “Demand for Letšeng’s large, high-value diamonds remains strong. The re-opening of China, the second largest diamond market, is expected to pave the way for a rapid rebound in economic activity, which bodes well for diamond prices in 2023.”

Photo Credit: GEM