Deep sea mining puts $560 billion in land extraction at risk — report
Even in optimal scenarios, the activity would generate only $6.25 million in tax revenue for countries involved, says Planet Tracker.
Shares in Petra Diamonds (LON:PDL) fell as much as 21% on Monday after the miner cut its forecast for 2018 earnings and said it will produce fewer precious stones as it focuses on recovering larger, more expensive rocks.
The South African diamond producer, owner of the iconic Cullinan mine, which produced the diamonds for the British crown jewels, said it expected its 2018 fiscal year earnings to be 10% to 15% per below consensus due to a stronger South African rand, which increases its US dollar costs.
The miner dropped 2018 output forecast to between 4.6 million and 4.7 million carats, on lower grades at Cullinan and worker strikes in the first quarter.
Diamonds, like most commodities, are priced in US dollars, meaning that Petra makes less from its sales when converted into its local currency.
The company, which is currently at peak debt levels of roughly $645 million, said net debt is expected to fall to between $560 and $600 million by June 30. It also noted it had begun formal discussions with its lenders to evaluate the covenants.
The company also cut its forecast for diamond production, expecting to now produce between 4.6-4.7 million carats (mcts), below its previous forecast of 4.8-5.0 mcts, primarily due to lower grade diamonds from its Cullinan mine.
“Petra’s stated strategy is to focus on value as opposed to volume production, which is particularly pertinent to diamond operations, as not all carats are of equal value,” the company’s chief executive, Johan Dippenaar, said in the statement.
Petra, which Tanzania accused last year of under-declaring the value of its diamonds, is caught up in an industry-wide crackdown by the East African nation’s government in an effort to reap more revenue from its minerals. Petra has denied those accusations.
