DiamondCorp warns over diamond prices as strike continues

Development delays caused by strikes at a diamond mine that provides stones to luxury jeweller Tiffany continued today as the miner warned prices have weakened.

Industrial action kicked off at Southern African miner DiamondCorp’s Lace Mine last week when the union demanded the appointment of two full-time salaried shop stewards.

DiamondCorp argues the Association of Mineworkers and Construction Union already has five shop stewards at the mine.

The company said that for every two weeks the strike continues, it will add approximately one week to the development timetable. But the mining group insisted that it remains on schedule to begin underground mining in the first half of next year.

The miner reported that diamond sales for the nine months to the end of September totalled 16,505 carats and its average year to date sales price of $65 a carat is 5 per cent above its forecast.

But the group, which made its first sale of diamonds to Tiffany & Co subsidiary Laurelton Diamonds at the end of last year, warned the “short-term demand for rough diamonds has softened” as sales of polished stones has begun to slow which has been made worse by the reduction of the number of banks which finance the sector.

However it said the “longer-term” outlook “remains strong as world economies continue to recover.”

It is awaiting the sale of two brilliant cut diamonds of 5.33 carats and 2.07 carats which were recovered from its tailing dumps – what has been dug up from creating the mine so far - in July.

DiamondCorp will receive 50 per cent of the profit from the sale of these polished gems.