Petra Diamond Case

Contents

Introduction        

Introduction of Petra Diamond and Diamond Industry        

About the company        

PEST analysis        

1.        Industry/Economy: Less supply, high demand        

2.        Social: Heavy social responsibility        

3.        Political:  high regulation and political risk        

4.        Technology:  High barriers to entry – Synthetic diamonds technology        

Important financial variables and trends over 5 years        

Operating profit margin        

Return on Equity (ROE)        

Capital structure and liquidity        

Major corporate actions and other developments in recent years, SWOT analysis        

Strengths:        

Weakness        

Threats        

Opportunity and Future plan:        

Conclusion        

References        

Introduction

This report aims to evaluate Petra Diamonds Limited Company, which is a mid-size producer in diamond mining industry. The report includes three main parts. The first section is the introduction and overview of the company as well as other information of the diamond industry. The second part is the review of financial strength and the trends of Petra’s financial statement, over the last five years. The last part discusses future development plan of the firm, in relation to SWOT analysis and conclusion.

Introduction of Petra Diamond and Diamond Industry

About the company

Petra diamond limited (PDL) is an independent mining group which explores produces and supply rough diamonds to international market. The firm has experienced rapid growth over the last 10 years and has become an important supplier for the global diamond market. After acquiring 5 major diamond facilities from 2007, mostly from De Beers, world largest producer, total mining capacity of Petra has piled up to 300 million carats, one of the world’s largest resources (Petra Diamond

In details, the portfolio of the firm has 5 mines in which four located in South Africa and one located in Tanzania. They are Finsch – Cullinan – Koffiefontein – Kimberley Underground – Williamson, ordered by capacity of diamond. Over the above five, Finches and Cullinan are the biggest, which Finches and Cullinan are biggest, contributes nearly 90% of production volume and 71% of revenue. (Petra Diamond Annual report, 2015)