Petra sells 299 carat diamond for $12.18 million

Petra Diamonds (LSE: PDL) has sold a 299.3 carat diamond recovered in January at its iconic Cullinan mine, in South Africa, to Belgium-based Stargems DMCC for US$12.18 million.

The exceptional Type 11a white gem-quality rock achieved a price of U$40,701 per carat, which exceeds the US$34,386 per carat received for the 424.89 carat “Legacy of the Cullinan Diamond Mine” in May 2019. 

The freshly sold find adds to other most famous diamonds unearthed at Cullinan, such as “The Blue Moon of Josephine”. This 29.6 carat blue diamond sold for US$48.5 million in 2015, a world record price per carat for any diamond sold at an auction at the time.

Petra Diamonds is in a weak financial position after two years of stagnant demand and heavy borrowing to expand its mines, particularly Cullinan. This drove it to put itself up for sale in June last year, though Petra reversed the decision in October, opting instead for the debt-for-equity restructuring.

The company’s board approved the reorganization in January, and Petra expects to finish the process around the end of March.

Petra’s shares slumped by more than 80% last year as the covid-19 pandemic battered the global diamond sector, with mines forced to shut down while consumer demand continued to fall.

The diamond miner, which has three operations in South Africa and one in Tanzania, is also dealing with allegations of human rights abuses at its Williamson mine in Tanzania, resulting from the actions of its security guards.

Petra said last month it had created an internal committee to oversee an ongoing investigation, which is being carried out by a specialist external advisor in conjunction with the company’s lawyers.