Output disrupted at Gem Diamonds

Prices rose, but problems at both its Ellendale and Letseng mines hit diamond miner Gem's first half output, with currency movements also causing some headaches."In the first half of the year we have had a number of operational challenges at both Let?eng and Ellendale," chief executive Clifford Elphick said. "With the unique nature of Let?eng's very high value, low diamond content resource, fluctuations in production are expected, however management believe that production targets for 2010 will be achieved by year end," he added.Ellendale should achieve all production targets in the second half of 2010, but may still be slightly behind targets for the full year."While the grade at Ellendale remains in line with expectations, both carats recovered and tonnage treated are expected to be high single digit percentage figures below the previous stated forecast due to plant availability issues in H1 2010," Elphick said.Gem sold 77,198 carats from Ellendale at an average price of $434 per carat in the first half to June, a sharp rise from the $160 per carat this time last year.At Letseng, Gem sold 41,544 carats at an average price of $1,728 per carat in H1 2010 ($1,308 per carat).Mining costs at both Let?eng and Ellendale are being affected by the weakening of the US dollar against the South African rand and the Australian dollar, but diamond demand is improving."Over the past six months both rough and polished diamond prices have strengthened, driven by demand from China and India and improving US demand. The supply demand outlook remains attractive for the industry," Elphick added. Gem Diamonds Di