Rockwell Diamonds revenue up amid growth in diamond demand

by admin 0

Third quarter revenue was up by 35 per cent year on year to 11.9 million dollars, on the back of a 57 per cent increase in diamond sales.

“When I started at Rockwell two and a half years ago we had two underperforming assets and one asset, the Saxendrift mine, which continues to be our flagship, is making money,” Rockwell Diamonds president and CEO James Campbell told CNBC Africa.

“Over a period of two and a half years  we’ve been able to sell Klipdam mine and we’ve been able to turn Tirosano mine from an owner-managed operation to a royalty-managed operation, which is now making money.”

Campbell added that the most important thing for the company at the moment was its focus on the middle Orange river, with the target of achieving half a million cubic metres per month of quality processed gravel.

The Orange River is the longest river in South Africa, and forms part of the international borders between South Africa and other Southern African countries.  

“We started round about 100,000 cubic metres. By the end of February of this year we’ll be up to about 360,000 cubic metres. There’s no magic behind this number. According to our calculations, every million cubic metres will recover plus 100 carat stone,” said Campbell.

“For us to achieve earnings feasibility, we need to process round about one to one and a half cubic metres of quality gravel every month.”

Third quarter operating profit for the period was recorded at 2.8 million dollars. Campbell added that the company expects substantial growth in the number of high net worth individuals in the next 10 years across the world.

These individuals tend to be in China, India and Malaysia and other countries within that region.

“The first area of demand, which we’re mainly interested in, is the high net worth individuals, the people who can afford the kind of diamonds Rockwell produces. If you’re producing plus 100 carat rough stones, these all produce plus 50 or 60 carat polished stones. It’s not everybody who can afford these,” he explained.

The second area of demand is within the engagement ring sector, where smaller diamonds are of more popularity.

Rockwell [DATA RDI:Rockwell] has a strong demand coming out of America, but China tops the list in particular, where a growing middle class is fuelling further demand.

The company’s beneficiation income has however taken a significant dip and down by 60 per cent. Its net loss however narrowed to 0.4 million dollars.

Campbell is nonetheless optimistic about future demand and growth.

“With the high seasonal sales coming out of the United States, between Thanksgiving and New Year, we are seeing stronger beneficiation income coming through as from December coming into January.”