Mountain Province Diamonds saw a decline in revenue for the second quarter of 2024, reporting sales of C$56.8 million, a 5% decrease from the same period last year. The drop was mainly due to a 39% decline in the average price per carat, which fell to C$102. Although sales volume increased by 55% to 557,361 carats, the lower prices outweighed these gains.
Market Conditions and CEO’s Insights
Mark Wall, CEO of Mountain Province Diamonds, highlighted the market challenges affecting the diamond industry. “The diamond market continues to be softer than anticipated,” Wall stated. “At a macro level, the return of demand in China has not materialised so far, and the market is now expecting a more protracted U-shaped recovery in diamond demand.”
This statement points to ongoing weak global demand, especially from China, which had been expected to boost sales as pandemic restrictions eased.
Production and Operational Challenges
During the three months ending June 30, Mountain Province Diamonds’ production fell by 2% to 1.3 million carats, due to processing lower-grade ore from the Gahcho Kué mine. Despite a 29% increase in total ore tonnes processed, the overall grade dropped by 24%. Mountain Province Diamonds, with a 49% share in the Gahcho Kué joint venture with De Beers holding the remaining 51%, produced 646,153 carats during the quarter.
Wall discussed the operational challenges, stating, “The good performance of the [processing] plant was offset by a lower grade in the quarter. Lower grade had been expected as per the mine plan…however…we have also seen a lower-than-expected grade at the deep portions of the pits continue through the quarter. The team has been working on identifying and isolating the small area of grade underperformance and…this will improve as we move through the year.”
Implications for Jewellers and the Industry
The decline in Mountain Province Diamonds’ revenue and the challenges in maintaining ore grade underscore the difficulties faced by diamond miners. For jewellers, this suggests potential volatility in the supply chain and pricing of rough diamonds. The anticipated slow recovery in demand, particularly from significant markets such as China, indicates that jewellers might need to prepare for continued fluctuations in diamond availability and costs.
Looking Ahead
Mountain Province Diamonds will release its full second-quarter results on August 7, providing more details on its financial and operational performance. This report will be important for stakeholders in the jewellery industry to understand ongoing trends and prepare for future market conditions.
