Petra Diamonds has reduced its production goal for its 2013 fiscal year by 200,000 carats to 2.65 million carats as a result of labor problems at its South African operations in October which cut output.
Petra announced the reduction in a trading update for the first six months of its 2013 fiscal year that ended on December 31, 2012.
But the miner stressed that the medium term outlook of achieving continued production growth until the development plans deliver production from the new mining areas "remains firmly intact".
In addition, it said that its annual production target of five million carats by 2019 is still on track.
Petra recorded a 31-percent rise on the year in the first half for output to almost 1.25 million carats compared with 953,553 carats a year earlier, boosted by output from the Finsch mine which it bought from De Beers in September 2011 for $210 million.
Output also received a boost from the start-up of operations at the Williamson mine in Tanzania as a result of the commissioning of the rebuilt plant, and the continued ramp-up to full production at the Kimberley Underground mine.
Petra said revenues surged 54 percent in the first half to $156.3 million from the sale of nearly 1.07 million carats of diamonds, compared with revenues of $101.4 million for the year-earlier period from the sale of 678,772 carats.
"Carat sales were lower than carats produced due to the seasonal timing of Petra’s tenders; as usual, Petra held three tenders in H1 (equating to five months production) and will hold five tenders in H2 (equating to seven months production)," the company says.
Petra said it had cash holdings as of December 31, 2012 of $38.8 million from $45.1 million a year earlier, and diamond inventories of just over $45 million compared with about US$38 million a year before.
Petra Diamonds CEO Johan Dippenaar said: “These results mark a further step change in production and revenues for the Group. Though we consider it prudent to revise full year production expectations, it is important to note that we still expect to report substantial production growth for FY 2013. Our production growth plans remain in place, with targeted output growing to five million carats by FY 2019.”
Petra said the mining industry in South Africa "experienced a challenging labour relations environment in 2012. Petra’s South African operations were affected by brief work stoppages during October 2012, although these disruptions were not as significant as those experienced in the platinum and other sectors. The stoppages experienced by Petra, combined with the adverse effect on productivity during the periods before and after the labour disruptions, resulted in production losses during H1 FY 2013.
"Production levels have now normalised and labour relations are stable," the firm says in a statement. "Petra has a strong record of good labour relations and remains focused on the ongoing dialogue which the company has always practised with the representative unions."
Petra also said the rough diamond market was "essentially flat" for the majority of the first half of its fiscal year however prices increased slightly towards the end of the half year.
"Petra expects the market to remain firm at around current pricing for the rest of its fiscal 2013 year."
