Petra to sell blue diamonds recovered at Cullinan

A 20.08-carat Type IIb blue diamond recovered at Cullinan.

Petra Diamonds (LON: PDL) announced the launching of a special tender process for the Letlapa Tala Collection, which comprises five blue diamonds sourced from the Cullinan mine in South Africa. 

Cullinan is known as the world’s most important source of blue diamonds, as well as being the place of birth of the 3,106-carat Cullinan diamond, which was cut to form the 530-carat Great Star of Africa and the 317-carat Second Star of Africa, being the two largest diamonds in the British Crown Jewels.

In a press release, Petra said that the name of the new collection actually means ‘blue rock’ in Northern Sotho (commonly known as Pedi), the predominant language spoken in the Cullinan area.


The collection consists of five Type IIb blue diamonds of 25.75, 21.25, 17.57, 11.42 and 9.61 carats, respectively. Type II diamonds contain no detectable nitrogen in their chemical structure and tend to display exceptional transparency. Type IIb stones contain a small amount of boron, which is what determines their blue colour.

“Blue diamonds are so rare that most people working in the diamond industry have never even seen one,” the media release states. “There are no official statistics on their recovery, so it is therefore even more unusual that these five spectacular stones were all recovered within the space of one week’s production in September 2020.”

According to Petra, this is likely to be the first time that five blue rough diamonds have ever been offered for sale at one time, with buyers being offered the chance to bid either on individual stones, more than one, or for the entire collection.

The Letlapa Tala gems will be available for viewings in Antwerp from October 25 to November 1; Hong Kong from November 5  to November 10; and New York from November 16 to November 20, 2020.


Petra Diamonds recovers five rare large high-quality blue diamonds at Cullinan Mine

blue diamonds Cullinan

South Africa’s Petra Diamonds, which put itself up for sale in June, announced on Wednesday it had found five high-quality blue diamonds, but toned down the news by saying the discovery won’t help turn around its fortunes.

Petra, which has been hit by a triple whammy of weak market conditions, power emergencies in the home country and covid-19, found the Type IIb blue diamonds at its flagship Cullinan mine.

The high quality stones, in terms of both their colour and clarity, range in size from 9.6 carats to 25.8 carats, the company said.

The miner didn’t indicate the diamonds’ potential value but said it is considering sale options.

“These finds, whilst a positive development, will not have a material impact on the likely terms of the required long-term solution to improve the group’s capital structure, nor the significant level of equity dilution that existing shareholders are likely to experience in connection with its implementation,” Petra said in the statement.

The company also warned that measures to improve its capital structure could result in significant equity dilution.

Blue stones are among the rarest and most valuable and have lately fetched higher prices than white diamonds. Last year, Petra sold a 20.08-carat blue gem for $14.9 million, or about $741,000 per carat.

“Flexible” approach to sales
Petra was already struggling when the covid-19 pandemic added further pressure to a sector that was just beginning to show some green shots.

The miner tried in 2019 to turn around its fortunes after piling up debt to expand its flagship Cullinan mine in South Africa. The renowned mine, where the world’s largest-ever diamond was found in 1905, produces about a quarter of the world’s gem-quality diamonds. It is also the source of the vast majority of blue stones.

In May, Petra failed to make an interest payment on a $650 million bond, but won some breathing space from creditors who said they would not declare a default until August.

The diamond producer also cancelled May and June tenders because of travel restrictions and low demand from the midstream. While it originally expected to hold a tender in September, Petra said it was still evaluating the optimal route to market for the stones it mines. It added it would release further information to its customer base once a decision about the marketing plan to follow had been made.

For now, the company is taking a “flexible” approach to selling diamonds in light of ongoing travel restrictions triggered by the global pandemic.

Despite the numerous challenges, Petra is targeting a ramp-up to pre-covid-19 production levels. It added it will disclose production targets for 2021 once it reaches a “sustainable level of operational stability.”

Origin of British Crown Jewels’ diamond revealed

Queen Elizabeth the II British Crown Jewels

The famous Cullinan diamond, which is now the centrepiece of the British Crown Jewels, likely originated in Earth’s lower mantle, right beneath the rigid and stable continental plates, where the mantle is slowly moving or convecting.

The finding is part of ongoing research carried out by Evan Smith and Wuyi Wang at the Gemological Institute of America. The new insight was presented by Smith at the virtual 2020 Goldschmidt Conference organized by US-based Geochemical Society and the European Association of Geochemistry.

Smith and his team concluded that the Cullinan diamond was likely formed in the lower mantle and can be considered a ‘super-deep’ stone after examining an analog, large 124-carat diamond from Gem Diamonds’ (LON: GEMD) Letšeng mine in Lesotho.

According to the researchers, recent analyses of this walnut-sized diamond revealed that it contains remains of an important element: bridgmanite.

The Cullinan II or the Second Star of Africa, a diamond that weighs 317.4 carats, is mounted in the Imperial State Crown. 

“Finding these remnants of the elusive mineral bridgmanite is significant. It’s very common in the deep Earth, at the extreme pressure conditions of the lower mantle, below a depth of 660 kilometres, even deeper than most super-deep diamonds,” Smith said in his presentation. “Bridgmanite doesn’t exist in the upper mantle, or at the surface. What we actually see in the diamonds when they reach the surface is not bridgmanite, but the minerals left when it breaks down as the pressure decreases. Finding these minerals trapped in a diamond means that the diamond itself must have crystallized at a depth where bridgmanite exists, very deep within the Earth.”

By aiming a laser at the tiny inclusions trapped inside the diamond, the researchers found that the way the light scattered (using a Raman spectrometer) was characteristic of bridgmanite breakdown products.

The Letšeng mine diamond is so pure that it doesn’t contain nitrogen in its crystal structure. This characteristic classifies it as a ‘Clippir’ diamond, which is the same category as that of the Cullinan diamond.

“What is special about this one is that it is the first Clippir diamond for which we can firmly assign a lower mantle origin, that is, below 660 kilometres,” Smith said. “Previously, we had known that Clippir diamonds are super-deep and speculated that their depth of origin might span 360 to 750 kilometres depth, but we hadn’t actually seen any that were definitely from the deeper end of this window.”

In the researcher’s view, this finding gives a better idea of exactly where Clippir diamonds come from and also shows that there is some overlap in the birthplace for Clippir diamonds and type IIb diamonds, such as the famous Hope diamond. This rare blue gem was owned by monarchs, bankers, heiresses and thieves until it landed at the Smithsonian National Museum of Natural History in Washington DC.

The overlap that Smith refers to points to a previous study in which the researcher showed that the Hope and other IIb diamonds originate in Earth’s deep mantle and that the boron that gives them a blue hue comes from the bottom of the oceans. To get into the diamond, the element is first dragged hundreds of kilometres by plate tectonics down into the mantle.

“It shows that there is a gigantic recycling route that brings elements from Earth’s surface down into the Earth, and then occasionally returns beautiful diamonds to the surface, as passengers in volcanic eruptions,” Smith said.


Petra Diamonds shares fall on lower diamond prices at flagship mine

Petra Diamonds

Shares of Petra Diamonds Ltd slid as much as 10 percent on Monday after lower diamond prices at its flagship Cullinan mine and an increase in net debt took the shine off higher half-year revenue.

The company has been trying to keep a lid on debt after heavy investments and a stronger South African rand had burdened the miner, which pays in rands and earns in dollars.

Petra’s net debt jumped to $557.2 million (422.06 million pounds) in the six months to Dec. 31 from $538.9 million as at Sept. 30. The company was forced to raise $178 million last May by issuing equity to cut its debt burden.

Rough diamond prices fell to $96 per carat from $140 per carat in the previous year at the Cullinan mine, which in 1905 yielded the Cullinan diamond the largest rough gem diamond ever found and now part of the Crown Jewels of the United Kingdom.

“The significantly lower realised Cullinan pricing and the impact on cashflow generation sees us take renewed caution,” said RBC, which cut the miner’s price target to 40 pence from 65 pence after the company’s half-year report.

Petra posted an 8 percent jump in revenue to $207.1 million, about 10 percent below RBC forecasts of $230 million, hurt by lower pricing at Cullinan. The company stuck to its production forecast 3.8 – 4.0 million carats for fiscal 2019.

Shares of the miner, which runs four mines in South Africa and one in Tanzania, were 8.5 percent lower at 41.12 pence.

Source: Euronews