London-listed Petra Diamonds, which owns and operates the Cullinan, Finsch and Koffiefontein mines, in South Africa, and the Williamson mine, in Tanzania, is taking steps to provide further financial flexibility should prevailing market conditions continue and diamond prices remain weaker-for-longer.

This includes amendments and deferrals to some capital programmes, which are expected to reduce Petra's extension capital expenditure (capex) for the 2024 financial year by up to $65-million.

At the Cullinan mine, the C-Cut extension project is being deferred until the end of June 2024.

Petra will also partially defer the CC1E project until the end of June 2024, with about half of the development crews continuing to develop the 813 and 833 levels of the sub-level cave (SLC) to ensure higher-grade ore is brought into production from the end of June 2024 onwards.

Further, at Finsch, Petra will defer the 3-level SLC extension project until the end of June 2024.

The 78-level Phase II project will, however, continue as planned to bring these production areas online during the 2024 financial year to supplement production from the existing SLC, which is nearing its end of life.

Petra will also defer $3-million to $5-million of sustaining capex at Finsch; delay the delivery of equipment on order given the pause in execution of the development programmes outlined above; and defer feasibility studies related to future capital investment opportunities and trade-off studies at all operations.

The diamond miner says it has also identified operating and group cost savings of between $7-million and $10-million against the 2024 financial year guidance.

The impact of the project deferrals on production and capex guidance for the 2025 and 2026 financial years will be provided on a mine-by-mine basis once the value-engineering and re-planning work have been completed.

"We expect there will be a reduction in current production guidance for these two years at a reduced cost base," Petra states.

CEO Richard Duffy comments that the actions being taken in response to the diamond market weakness are aimed at ensuring Petra remains resilient and able to withstand weaker-for-longer market conditions.

"While diamond inventories remain elevated in both rough and polished goods, we are confident that the discipline shown by diamond producers, as well as the Indian diamond import moratorium to mid-December, will lead to a recovery in pricing once demand strength returns.

"Through adapting our cost base and deferring two of our capital projects, we are targeting cash savings of up to $75-million by June 2024, while minimising the impact of these deferrals and aiming to deliver increased production into a stronger pricing environment. We will continue to maintain our flexibility to respond to market conditions safely and responsibly, through our enhanced operating model and flexible sales approach," he says.