Stronger rand sinks DFI

Shares in marine diamond miner Diamond Fields International (DFI-T) dove 15, or 25%, to 45 in early trading in Toronto on Jan. 26 after the company said it had suspended mining operations off the coast of Namibia.

DFI and partners Gemfarm (owner and operator of marine mining vessel M.V. Anya) and Lazig Ltd. say operating costs have become prohibitively high as a result of the stronger South African rand.

Says DFI’s operations director, Roger Daniel: “We believe it is prudent to suspend current mining operations while we work with Lazig and others to explore cost-effective production options, including new technology.”

The M.V. Anya had just resumed mining in late September 2003 following a longer-than-expected delay in changing the ship’s classification following its sale. Between then and mid-November, DFI recovered 5,394 carats of diamonds from the Marshall Fork deposit, off the coast of Luderitz. The average recovery was 3.1 carats per square metre, which exceeded projections. Most of the stones are gem-quality.

During December 2003 and January 2004, DFI sold 6,292 carats at an average price of US$145.82 per carat.

During the hiatus from mining, DFI will look at alternative production options.

DFI’s main Namibian concession covers more than 70 km of coastal waters between Hottentot Point to the north and Diaz Point to the south, centred at Luderitz. Within that area are the diamondiferous Marshall Fork, Diaz Reef and Conical Beach features.