Petra Diamonds has announced a formal business rescue operation for its Finsch mine, attributing the move to declining diamond prices and a strong exchange rate impacting earnings.
This decision may lead to potential job cuts as the company restructures.
Petra plans to appoint a Business Rescue Practitioner to manage the process and will provide further updates as required under the South African Companies Act.
To address the challenging market conditions, the company is taking several cash preservation measures. These include halting capital expenditure at Finsch and redirecting resources to the Cullinan mine.
The company is exploring cost reductions and streamlining operations at Cullinan, which could affect employment levels.
Efforts are focused on boosting production in high-value areas of the Cullinan mine while testing productivity enhancements.
Petra attributes the Finsch mine’s vulnerability to its reliance on smaller diamond sizes, which have seen a structural price decline.
The Cullinan mine, known for its high-value Type II stones, is expected to help offset some of the financial pressures.
In line with these adjustments, Petra has initiated a process under Section 189A of the South African Labour Relations Act, aiming for expenditure reductions across the group.
Petra Diamonds CEO Vivek Gadodia said: “We are faced with an unprecedentedly weak diamond market, due to global macro factors as well as the recent Middle East tensions. In particular, we continue to see deterioration in the value of the smaller sized diamonds, where we do not currently expect a material near-term recovery.
“Our tender results for April 2026 and May 2026 have yielded an average price for Cullinan Mine of c. $81/ct [carat] (compared to $109/ct in Q3), while Finsch averaged c. $47/ct (compared to $56/ct during Q3).”
Petra’s Board has also announced a leadership change, with Juan Kemp stepping down as joint CEO operations by the end of May 2026 after 18 years with the company. Gadodia will assume full CEO responsibilities and join the board as a director.
The group is working on a revised business plan, expected by the end of September 2026, which will incorporate the outcomes of the business rescue and labour processes.
