Firestone Diamonds, the country's only other diamond producer after Debswana, sold stones worth P2.9 million from its fourth auction of the year that was held in Gaborone last week.

The gross proceeds were off 1,549 carats from Firestone Diamonds' BK11 Mine near Orapa and represent a decline from the company's July auction where 2,241 carats worth about P3.4 million were sold.

The diamonds sold at last Friday's auction attracted higher prices, with BK11 stones fetching an average of US$282 (P1.900)per carat compared to US$235 per carat in July. Liqhobong production sold for an average US$235 per carat, compared to US$123 per carat in July.

In a statement released on Wednesday, Firestone officials said including stones from the company's Liqhobong Mine in Lesotho, the auction generated proceeds of US$863,000 (P5.7 million) from 3,395 carats sold. The total proceeds are a drop from the US$2 million (P13.4 million) generated at the July auction from the sale of 14,248 carats from both BK11 and Liqhobong.

Firestone officials pointed out that although 24,109 carats were on offer this week - the highest in the company's four auctions thus far - actual sales were lower than the July event as approximately 20,000 smaller diamonds were withdrawn due to low bids. The smaller diamonds did not achieve reserve prices, resulting in their withdrawal from the auction.

"We have continued to make significant progress at both Liqhobong and BK11, with a 69 percent increase in production available for sale from the last tender in July 2011," commented Firestone Diamonds CEO, Tim Wilkes.

"Although demand for smaller diamonds has decreased, it has remained firm for larger, better quality diamonds, and we are confident that we will see increased demand for our full range of production later in 2011."

Firestone officials revealed that following the closing of the tender last Friday, a number of enquiries had been received concerning the withdrawn diamonds, "but these will be held until the next diamond sale". The UK-based miner said the negative effects of withholding diamonds from this week's sale would be absorbed by the stronger cash position the company is in. Says the statement:

"Following the completion of the �13.5 million (P145.5 million) financing announced in July 2011, the company's cash position remains secure, and the company has the ability to withhold any production that does not achieve reserve prices until stability returns to the rough diamond market later in 2011 or in early 2012. The next diamond sale will be held in Q4 2011, with the timing to be selected on the basis of financial market and rough diamond market conditions."

Firestone said while rough diamond prices had risen approximately 40 percent in the first half of the year, they had dropped off by between 15 and 20 percent since the beginning of August on uncertainty in international markets. Most producers and retailers attribute the price jump in the first half of the year to a shortage of stones on the market, as well as high demand in China and India. Echoing the Diamond Trading Company's recently published sentiments, Firestone officials said the company expects prices to stabilise towards the end of the year, while continuing the shortage of the precious stones will limit any price drops in the interim.

Rough diamond demand and consequently prices, tend to peak leading towards the US Thanksgiving holiday, as well as the Christmas, New Year and Chinese New Year periods at year-end.