Gem Diamonds profits tripled in 2011

Published:  22 Mar at 6 PM

As reported by the BBC, Gem Diamonds announced that strong demand and production rises helped triple profits, making 2011 an "exceptional year". The London-based diamond producer said manufacturing at its Letseng mine, located in Lesotho, aided the increase.

The firm said it was still working on expanding its mining operations in the hopes of doubling its capacity before 2014. The firm’s pre-tax profits reached $155.7 million (£98 million, 117.4 million euros) for 2011, up from $54.5 million one year earlier.

Gem Diamond's CEO, Clifford Elphick, said the firm hoped to see high demand for its diamonds from both developing and developed markets, despite the challenging economic times. China is a vital source of demand, he said.

Costs for rough diamonds went up in the first six months of 2011 to above pre-crisis rates thanks to demands from Asia, before falling sharply during the last five months of 2011 as financial markets suffered. The firm has two production mines –Australia’s Ellendale and Lesotho’s Letseng, as well as the new Ghaghoo mine under construction in Botswana.

The firm, which is a vital supplier to the jewellers Tiffany & Co., also forecast even higher sales for 2012. The company reported a net income of $178.4 million for the fourth quarter of 2011, down from the $181.2 million it made one year earlier.