Trans Hex Annual Earnings Plummet 57%

South African diamond miner Trans Hex has taken a big hit from the strengthening of the rand against the dollar, reporting a 56.7 percent drop in annual headline earnings. While diamond sales were 3 percent lower in rands - R1.015 million – in dollars they were 13 percent higher - $162.2 million.

The South African rand strengthened 18 percent during 2004.

Land mining production didn’t help either, decreasing 2.3 percent to 137,100 carats while marine diamond production leaped 87 percent to 69,900 carats during the year.

Trans Hex reported the sale of a few exceptionally large diamonds. A 96-carat D color Baken stone, sold for $2.5 million, and two stones each in excess of 100 carats in weight, were sold, one of which fetched over $1 million.

With strong demand for rough diamonds this year, the company expects diamond prices achieved through its South African marketing system to “remain firm or may even improve slightly”.

The company adds that the proposed amendments to the South African Diamond Act “are envisaged to pose challenges as well as provide opportunities for Trans Hex’s diamond marketing system. Trans Hex is actively pursuing a beneficiation strategy that seeks to satisfy the requirements of key stakeholders.”