Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
London-listed Gem Diamonds announced Tuesday it has sold the world’s 14th largest white diamond discovered at its Letšeng Mine in Lesotho two months ago for $16.5 million in cash. Gem will also share in the profit of any diamonds cut from the 550 carat Letšeng Star.
Letšeng is fast-becoming the richest source of large diamonds in the world and without the occasional large diamond find, the Letšeng pipe would probably be a marginal deposit, but the mine, 30% owned by the King of Lesotho, has also yielded the the 478 carat Light of Letšeng that went for $18.4 million in 2008.
The 603 carat Lesotho Promise was turned into a $12.4 million necklace and the 493 carat Letšeng Legacy sold for $10.4 million in 2007. In August Gem Diamonds announced record first half profits as diamonds from Letšeng achieved an average value of $3,052 almost double that of 2010. The mine produced in the six-month period 105 diamonds that were valued at more than $20,000 p/c.
The world’s biggest certified diamond is the 3,106-carat Cullinan, found at the mine near Pretoria, South Africa, in 1905. It was cut to form the Great Star of Africa and the Lesser Star of Africa, set in the Crown Jewels of Britain.
