Firestone Diamonds halts Liqhobong mine expansion plans, limits losses
Africa-focused Firestone Diamonds (LON:FDI) has put plans to extend the life of its 75%-owned Liqhobong mine in Lesotho on the back burner, saying that current market conditions don’t support the project.
The company, which reported 2019 interim results on Thursday, managed to limit its losses in the six months to December 31, 2018, despite a global price slump for smaller, lower-value diamonds.
Firestone lost $6.6 million in the period, or 1.3c per share, compared to a loss of $7.8 million, or 2.2c per share, in the first half of the 2018 financial year.
Higher production and average grade per carat from Liqhobong — 465,680 compared to 379,716 carats in 2018 — help shore up finances, though prices for its low-end diamonds and a $2.2 million charge ultimately weighed on the bottom line.
Diamond miners are struggling across the board, especially those producing cheaper and smaller stones where there is too much supply. In December, some of Rio Tinto’s (LON, ASX: RIO) customers refused to buy cheaper diamonds, while De Beers has been forced to cut prices and offer concessions to buyers.
Firestone spent $185 million building Liqhobong, which started production in late 2016, and boasts over 11 million carats in reserve. The total open pit resource contains over 17 million carats to a depth of 393 metres.