Johannesburg — DIAMOND miner and explorer Petra Diamonds turned last year's operating loss into a profit as it earned a full year of revenue from the Koffiefontein mine acquired from the De Beers group and experienced a period of strong diamond prices.

CEO Johan Dippenaar said this week although the uncertainty in global markets could affect pricing of and demand for diamonds, Petra remained "very upbeat" about the fundamentals for the market because of tight supply and the emergence of new customers in the eastern countries. The company's long-life operations put it in a good position to supply the growing demand for diamonds.

Since January last year, diamond prices had risen 40% on average while prices for top-quality diamonds had risen 70%, it said.

Although its diamond mining is all located in SA and Tanzania, and its exploration is in Angola, Botswana and Sierra Leone, Petra Diamonds is listed only in London and not on the JSE. The company's shares had dropped 1% to 98,5p on Tuesday, although they were as high as 150p late last year.

Petra mined 200287 carats in the year to June. Next year, the Cullinan, Kimberley underground and Williamson mines, also acquired from De Beers, would contribute to revenue and bring annual production to a target of 1-million carats.

Group revenue rose almost fourfold to $76,9m compared with $17m in the same period last year and operating profit was $25,5m against a previous loss of $5,2m. The basic loss of 3,93c a share was an improvement on last year's loss of 13,60c, taking into account an income tax charge of $5,9m from a previous credit of $1,9m. Petra held $37,5m in cash at the end of June.

The company also announced it would sell its investment in Calibrated Diamonds, a diamond cutting and polishing business, to Gem Diamonds for $5,9m, or R47m, in cash to focus on diamond exploration and mining. Under the agreement, Petra will have an option to access the diamond cutting businesses Gem is establishing in Mauritius and Dubai, as well as an option to use Calibrated's technology to set up a beneficiation operation at Cullinan or elsewhere in SA.

Asked whether, as Petra Diamonds' production grew, it would change its marketing system from one of holding tenders to something similar to De Beers' sightholders or Rio Tinto's selected customer system, Dippenaar said Petra would continue with the tendering system "for the time being". As production volumes grew, Petra could look at whether a different system would increase revenue.