Gem Diamonds finds 245-carat diamond at Letseng

The 245-carat diamond found on June 11, 2022. (Image courtesy of Gem Diamonds.)

Africa-focused Gem Diamonds (LON: GEMD) has found a 245-carat rough stone at its Letšeng mine in Lesotho, the miner’s third one over 100 carats mined this year and the largest so far.

The company, known for the recovery of large, high-quality stones in 2020, has seen output of high-quality diamonds surpassing the 100-carat mark become less frequent over the past year.

In 2021, Gem Diamonds found only six of such diamonds at Letšeng, compared to the 16 it discovered in 2020.

The find comes as prices for small diamonds have jumped about 20% since the start of March, as cutters, polishers and traders struggle to source stones outside Russia.

State-owned Alrosa (MCX: ALRS), the world’s top diamond producer by output, was hit with US sanctions following Moscow’s invasion of Ukraine.

Higher prices for lower-end stones are good news for miners, but not a game changer, experts say. While every mine is different, a general rule of thumb is that 20% of production — the best stones — account for about 80% of profits. 

Since acquiring Letšeng in 2006, the company has found more than 60 white gem quality diamonds over 100 carats each, with 16 of them recovered last year.

At an average elevation of 3,100 metres (10,000 feet) above sea level, Letšeng is also one of the world’s highest diamond mines.