Diamond News Archives

The structure of the global economy today is built on the incessant yet tenuous reliance on monetary and fiscal stimulus. To put it bluntly, policy makers are in a pickle.

(IDEX Online) - British miner Petra Diamonds reported a $223m loss for the year to June after facing "unprecedented challenges".  It follows the $258m loss it posted last year.

 

Revenue slumped 36 per cent to $295.8m (FY 2019: $463.6m). Its Williamson mine, in Tanzania, has been on care and maintenance since April because of coronavirus.  

The Cullinan mine - source of source of the largest rough gem-quality diamond ever - as well as Finsch and Koffiefontein, all in South Africa, remain open.

Petra said that ongoing uncertainties meant production guidance for FY 2021 remained suspended.

It had been struggling before the global pandemic and has last month agreed a debt-for-equity restructuring deal with lenders, after failing to attract any buyers. It will will leave existing shareholders with just nine per cent of the company.

Chief executive Richard Duffy said: "I am confident that we are now well down the road in repositioning Petra for a successful and sustainable future, building on the operational successes delivered to date and benefiting from a capital restructuring, once complete, that will result in considerably lower levels of debt going forward."...

(IDEX Online) - Luxury spending will fall by almost a quarter this year as coronavirus sees the sector contracting for the first time in over a decade.

Management consultants Bain & Co predict a 23 per cent drop in 2020, down by $257bn. Sales had been increasing year on year since 2009.

They say the industry is "on a path to recovery by 2022-2023".

Jewelry has seen sustained demand in Asia, and a significant increase in online sales, says the report. It "remains polarized with high jewelry and iconic entry priced items leading the recovery."

Sales of watches are down 30 per cent. "Covid-19 amplified the already critical secular consumption pattern shifts from the category," says the 19th edition of the Bain & Company Luxury Study, released in Milan last week.

E-commerce has protected all luxury retailers from more serious Covid damage.

  

"Online shopping for luxury goods has soared, doubling its share of the market to 23 percent in 2020 from 12 percent in 2019," says the report.

"The turmoil of Covid-19 has been the catalyst for change for the luxury industry, which is on a path to recovery by 2022-2023." ...

Ultimately, this is a market that is going to react to the US dollar and of course the overall risk appetite around the world as silver is also an industrial metal, not just a precious one. Because of this, I like the idea of buying short-term dips and have for a while.