Gem Diamonds Triples Profits and Plans Mine Expansions
3/21/2012 8:31:09 AM Shira
Gem Diamonds—a leading global diamond producer that owns two production mines in Lesotho and Australia—has reported rising share prices, gaining almost a quarter in the past week. Gem more than tripled its profit in 2011 and exceeded market expectations.
Gem Diamonds' revenue and its pre-tax profits have risen in the past year. Gem Diamonds' Lesteng mine in Lesotho produces some of the world's largest diamonds. Diamond billionaire and art collector Laurence Graff has a stake in Gem Diamonds and has expressed his like for the mine, particulalry for the large stones its produces. Plans are underway for expanding Lesteng mine with the goal of doubling production by 2014. Tiffany & Co. has a deal to use Gem Diamonds' yellow diamonds that are produced in Australia—Gem Diamonds' Ellendale mine in Australia produces about half of all the fancy yellow stones in the world.
Gem Diamonds may sell Ellendale mine in Australia to focus on expanding its Lesotho Letseng mine. Gem has already confirmed that potential bidders have looked at the mine. Earlier this year, Gem had pulled out of the race for BHP Biliton's Ekati mine.
"We are always on the lookout for opportunities to grow the company in a sensible way. We have looked at lots of opportunities, but for various reasons they have not made it over the hurdles we have set for ourselves," said Gem CEO Clifford Elphick.
The diamond industry as a whole has been very volatile over the past few years, primarily a result of the global financial crisis.