JOHANNESBURG (miningweekly.com) - London-listed Petra Diamonds was set to boost its production by 12% to three-million carats in the 2014 financial year, and remained on track to achieve its long-term production target of five-million carats a year by 2019, CEO Johan Dippenaar said on Monday. 

The company produced 2.67-million carats in the 2013 financial year, with its new Finsch mine, in the Northern Cape, delivering more than half of the total output.

In its analyst guidance for 2014, Dippenaar said Petra would treat about 17.5-million tons during the 2014 financial year, which would amount to an 18% increase from the 14.8-million tons treated during the 2013 financial year. This would include 10.7-million run-of-mine (RoM) tons treated in 2014, an increase of 18% compared with the 9.1-million RoM tons treated in 2013.

“The increase mainly owes to an expected increased RoM tons throughput at our Cullinan, Williamson and Kimberley Underground operations,” he said.

Total operating costs were expected to remain well controlled; however, certain cost categories, such as labour and electricity were expected to increase above the South African consumer price index (CPI), owing to South African mining inflation running above CPI and the weakening rand resulting in increased costs associated with imported components.

With regard to cost increases relating to labour, Petra Diamonds FD David Abery said that the negotiation process was ongoing and that the company was looking forward to a positive result.

Expansion capital expenditure across South Africa for the 2014 financial year was expected to amount to R1.545-billion, an 8% increase when compared to previous guidance, which forecast expansion capex of R1.43-billion for the period.

“This increase is owing to timing differences in capex from the 2013 financial year to the 2014 financial year and detailed planning revisions at Cullinan, Koffiefontein and Kimberley Underground operations. This was partially offset by a decrease in capex at the Finsch mine as a result of revisions to the ore-handling system,” he stated.

Commenting on the diamond market, Dippenaar said he expected pricing to be supported by constrained supply and a firmer US market. Continued growth in China, albeit at a lower rate than over recent years, and the seasonal increase in demand for polished diamonds, owing to the traditional festive periods, also boded well for prices.