Britain - Gem Diamonds reported an 87% jump in first-half underlying core earnings as it sold more diamonds at higher prices and said it expected pricing to remain strong in the second half..
The diamond miner, which has operations in Lesotho and Botswana, said underlying earnings before interest, taxes, depreciation and amortisation rose to $62.2m during the six months ended June 30, from $33.2m a year earlier.
Revenue rose 54% to $148.9m.
Reduced breakage, higher quality diamonds mined in
Letseng, Lesotho and a strong market for large, high-quality rough
diamonds helped push revenue up 54% to $148.9m, the
company said on Wednesday.
Natural rough diamond prices may rise 5% to 10% this year, helped by recovering demand for polished stone used in jewellery, according to Belgium's Antwerp World Diamond Centre (AWDC).
Healthier credit conditions in India, the world's leading diamond polishing market and a rise in disposable incomes in the hands of China's burgeoning middle class is boosting demand for the precious stone.
Furthermore, researchers are predicting growth in the US jewellery market, traditionally the largest retail diamond market, to help buoy rates fetched by miners.
"The second half of the year should see strong pricing maintained as (Gem Diamonds) continues to see robust long-term support for diamond prices with continued growth in demand from non-traditional markets in Asia and strength in traditional markets alongside limited growth in supply," Gem Diamonds said.
The company said in July that carats recovered from Letseng during the first-half rose 29% to 45 678 carats. Average value per carat from the first five tenders of the year soared 58% to $2 747.
Rough diamonds mined at its flagship Letseng mine, located in the Maluti mountains of Lesotho, and are sold on tender in Antwerp by a unit of the miner.
Since Gem Diamonds acquired a 70% stake in 2006, the mine has unearthed four of the 20 largest white gem-quality diamonds ever recorded. The government of Lesotho owns the remaining 30% stake.
Gem Diamonds, which is also developing the Ghaghoo mine in Botswana, said a sale of the mine's initial production was scheduled to take place before the year end.
Gem Diamonds shares closed at 207.75 pence on the London Stock Exchange on Tuesday.