Gem Diamonds expects rise in rough price to continue

Gem Diamonds said rough diamond prices would continue increasing going into the second quarter, with prices both in the polished wholesale market and high-end branded auctions expected to improve.

Lesotho brown diamond / Photo: Gem Diamonds

For the Jan. 1 to April 15 period, the sales value of Gem Diamonds's rough diamonds rose 46 percent to $24.3 million, but carats sold fell nearly 29 percent to 23,200.

Prices for rough diamonds jumped in the first half of 2011 on low inventories and rising Asian demand, but fell sharply in the last five months of the year as markets tumbled and investors took cover.

The miner, which focuses on large, high-quality diamonds, said its key Letseng mine in Lesotho produced a total of 43 rough diamonds that achieved prices greater than $20,000 per carat for the period.

"The Letseng resource has exceeded expectations," Chief Executive Clifford Elphick said. "Carat production and grade are both up when measured against the corresponding period last year."

Last month, Gem Diamonds reported that its 2011 profit had tripled, and said it would focus on its growth projects to boost production.