Rough diamond price firms in first quarter

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MASERU — The prices of rough diamonds firmed in the first three months of this year, according to the latest report produced by Gem Diamonds, the parent company that owns Letseng Diamonds.

In a statement released on Monday, Gem Diamonds said the prices were a significant improvement from figures recorded last year.

“The better than expected Christmas sales in the US, restocking in the cutting centres and continued strong demand for diamond jewellery in India and China have resulted in strong rough and polished diamond prices.

“It is pleasing to note that improved consumer demand in the quarter is impacting positively on polished prices which have risen albeit not as sharply as the rise in rough prices.

“The fundamentally positive supply demand picture remains,” said Gem Diamonds.

Gem Diamonds holds a 70 percent stake in local mining company, Letseng Diamonds, while the remaining 30 percent is held by the government of Lesotho.

The statement said Letseng Diamonds had produced 15 468 carats in the first quarter which were sold at an average price of US$1 753 per carat, a significant increase from the selling price of US$1 017 per carat during the same period in 2009.

A total of 12 diamonds that were recovered in the first quarter were sold at prices greater than US$20 000.

The diamonds include a 33.87 carat diamond that was sold for US$53 484 (M416 130) per carat and a 57.24 carat diamond which sold for US$49 552 (M371 640) per carat.

“(About) 100 rough diamonds greater than 10.8 carats were recovered from the Letseng,” Gem Diamonds said in the report.

Gem Diamond said the Letseng April tender achieved an average price of US$2 002 per carat.

During the January and March tenders diamonds of between 15.21 and 33.87 carats were sold for between US$22 856 per carat and US$53 484 per carat.

“Local mining costs have been contained within inflation targets, however, mining costs at Letseng continue to be impacted negatively by the weakening of the US dollar against the South African rand,” said the statement.

Rough diamond sales at Letseng Diamonds were 20 percent higher at US$27.1 million (M203.25 million) with 15 468 carats sold, compared to US$22.6 million (M169.5 million) in the same quarter last year.

Rough diamond prices fell sharply in 2008 because of falling demand on the market.

Letseng is famous for unearthing some of the biggest stones in the world, and for producing high quality diamonds that fetch high prices on the world market.

The annual production is over 90 000 carats.

The mine resumed production in 2004.

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