Gem Diamonds has announced a lower production and sales forecast for 2025, attributing the reduction to a shift toward mining lower-grade ore. The company anticipates producing 84,000 to 88,000 carats from its Letšeng mine in Lesotho, down from the 98,000 to 101,000 carats expected in 2024. Similarly, sales volume is projected to fall to 82,000 to 86,000 carats, compared to this year’s forecast of 100,000 to 103,000 carats.
Transitioning to Lower-Grade Ore
The revised outlook follows the completion of mining higher-grade ore from Letšeng’s satellite kimberlite, with production now shifting to the main-body ore, which yields a weaker product mix.
Gem Diamonds CEO Clifford Elphick highlighted how market conditions have compounded challenges:
“One of our major competitors is selling diamonds indiscriminately, which is impacting us. Once the market strengthens, we will return to our regular tender system.”
Signs of Stability Amid Turbulence
Despite the challenges, the company reported some price stability during its recent Dubai tenders. Notable increases of 3% to 5% were observed for rough diamonds in the 2- to 3-carat and 5-carat categories. However, Elphick expressed concerns about potential market disruptions following De Beers’ recent price reductions on rough diamonds during its final tender of the year.
Geopolitical and Economic Factors at Play
The company also cited several external pressures:
- Middle East conflict, which has impacted its Israeli customers.
- Concerns about the potential effects of Donald Trump’s re-election, including trade wars, tariffs, and market uncertainty.
Elphick remains cautiously optimistic, noting that strong holiday sales and restocking could boost market sentiment.
“While I don’t foresee a recovery in the near term, restocking in January might spark positive momentum. I hope I’m wrong about the market outlook.”
Looking Ahead
Gem Diamonds continues to adapt to challenging conditions, leveraging tender data and maintaining a long-term vision. The company’s success hinges on market stabilization and improved sentiment, which could pave the way for a recovery in 2025.