Petra Unearths Diamond the Size of a Chicken Egg

By Thomas Biesheuvel

Sept. 29 (Bloomberg) — Petra Diamonds Ltd., a miner of the stones in Africa, said it unearthed a gem the size of a chicken egg at the Cullinan mine that may be among the 20 largest “high quality” rough diamonds discovered.

“Initial indications are that it is of exceptional color and clarity, which suggest extraordinary potential for its polished yield,” Chief Executive Officer Johan Dippenaar said in a statement today.

The 507.6-carat stone, weighing more than 100 grams (3.53 ounces), may sell for more than $20 million, Brock Salier, an analyst at Ambrian Partners Ltd. in London, wrote in a note. “That would probably be a guide,” Dippenaar said, when asked about the estimate on a conference call. “We certainly hope it’s not that little.”

The world’s biggest certified diamond is the 3,106-carat Cullinan, found at the mine near Pretoria, South Africa in 1905. It was cut to form the Great Star of Africa and the Lesser Star of Africa, set in the Crown Jewels of Britain. Petra sold a 7.03-carat blue diamond, cut from a 26.58-carat rough stone found at the mine, for $9.48 million in May.

Petra rose 5 pence, or 7.9 percent, to 68 pence in London after it unveiled the latest find, which spokeswoman Cathy Roberts said was the size of a medium chicken egg. The stock has more than doubled in the past six months.

St. Helier, Jersey-based Petra also found three other “special” white stones weighing 168 carats, 58.50 carats and 53.30 carats, it said. A carat equals 0.2 gram. The three stones may fetch more than $10 million, according to Salier.

Reports Loss

Rough diamond prices are rebounding after falling as much as 65 percent from September last year to March, according to Ambrian, as the global economic slump slashed demand for luxury goods. Petra today reported its full-year loss widened to $90.9 million after the price slump and as it wrote down the value of some mines and exited exploration projects in the first half.

The figure compares with a $7.2 million loss a year earlier. Sales slipped 10 percent to $69.3 million.

“We remain cautiously optimistic that we have seen a bottom of the market,” Petra said in a statement. Diamonds are still selling at prices 30 percent to 35 percent lower than averages achieved for the year though June 2008, it added.

De Beers, the world’s largest supplier, has restarted operations in Botswana and Namibia after cutting first-half output by 73 percent. ZAO Alrosa, the Russian state-run diamond monopoly, resumed sales in May as demand improved.

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