Petra Diamonds losing some sparkle, net profit down 33 pct

Petra Diamonds losing some sparkle, net profit down 33 pct

Cullinam mine at dusk. (Image courtesy of Petra Diamonds)

Petra Diamonds (LON:PDL) reported Friday a sharp in fall profits as declining demand from China has hit rough diamond prices quite hard this year.

The miner, known for major findings in recent months, saw its sales drop, causing an almost $40 million dent in the company’s pre-tax profits in the year to June, a 33% drop from the same period last year.

The company said results were negatively impacted by “underground production being reliant on mature, diluted mining areas, as well as the weaker diamond market, though partially offset by the favourable impact of the weakening in the Rand for the year.”

Petra also said it was on track to reach its longer-term target of about 5 million carats of diamond production a year by 2019.

The company owns and operates the Cullinan diamond mine, which produced the First Star of Africa, a diamond mounted at the top of the Sovereign's Sceptre on display in the crown jewels.

Last year, the UK miner found three major diamonds at the mine, which sold at record prices. One of those rocks, the “Blue Moon” may become the world’s most expensive diamond if it fetches the expected $55 million when it goes under Sotheby's hammer on Nov. 11, in Geneva.