Gem Diamonds suffers as prices slump

Gem Diamonds, the Australia and Africa focused minerals miner, has been forced to delay development projects at two of its operations as the falling price of diamonds has begun to bite.

In the six months to the end of June total revenue was $180.2m against $196.5m in the same period of last year.

Profits before tax for the period were down sharply at $36.3m against the $79m seen in the prior year.

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The main problem has been the drop in the price of diamonds at the group's Letseng mine in the Kingdom of Lesotho, where the average value of diamonds for export fell from $3,052 per carat last year to $2,133 this year.

This drop in price has forced the board to delay two big development projects in Botswana and Lesotho. The Chief Executive, Clifford Elphick, said if economic conditions improves, the company would consider "accelerating" the projects once again.

The group's shares have fallen 2% this year and are down 16% since May.

BS