London-listed Petra strikes deal to supply renewable energy to its SA diamond mines

Petra Diamonds’ new Cullinan mine plant and final recovery buildings. Photo. Supplied.

Petra Diamonds’ new Cullinan mine plant and final recovery buildings. Photo. Supplied.

Published May 24, 2024


London Stock Exchange-listed Petra Diamonds is the world’s largest producer of rough diamonds by value and is focused on the highest margin section of the diamond pipeline.

With South African miners susceptible to production disruptions from rotational power cuts by Eskom, Petra Diamonds has turned to independent renewable energy suppliers while also helping to curb emissions from operations.

The company announced yesterday that it had entered into long-term Power Purchase Agreements (PPAs) for the procurement of wheeled renewable energy for its Cullinan and Finsch diamond mines with Etana Energy, a licensed South African energy trader.

Petra Diamond CEO, Richard Duffy, said the agreements signed by the company will see Etana supplying each of Petra Diamonds’ two mines in South Africa with up to 72% of the expected load requirement from 2026 financial year onwards.

“These agreements align with Petra’s renewable strategy and exemplify the Company’s continued integration of its sustainability ambitions,” he said.

Duffy said the power purchase agreements would result in a considerable reduction of emissions, well ahead of Petra’s 2030 target, and would further strengthen the sustainability credentials of the diamonds produced by the company.

“We consider this to be an important facet, alongside the traceability and provenance of our diamonds, in differentiating Petra’s product offering,” Duffy said.

“As part of our ongoing efforts to reduce our cost base, the tariff secured is expected to lead to sustained reduction in our energy supply costs which will further reduce fixed costs at our South African operations.”

Global diamond prices have remained suppressed, prompting larger operators such as Anglo American to mull disposal of its diamond producing unit, De Beers.

However, Duffy last week maintained a rosy outlook of the diamond market and prices for the remainder of this year.

“We continue to see evidence of stabilisation in the market and are cautiously optimistic that demand and pricing will improve towards the end of this calendar year,” he said.

In line with this, the company was planning to undertake another diamond sales tender next month.

Duffy said lower diamond prices were largely due to “seasonal weakness being evident across virtually all size” categories.

Petra is aiming to fulfil its target of reducing its scope 1 and 2 emissions by 35-40% by 2030, helping reduce the company, which also has operations in Tanzania, to reduce its carbon footprint.

Moreover, the company has long term commitments to generating zero emissions on a net basis by 2040.

Etana Energy is a supplier of cost-competitive clean energy from new large-scale renewable energy projects.

It wheels its power supply over the existing South African grid and has a portfolio of multiple ready-to-build and grid-secured wind and solar projects that are expected to come online over the course of 2025 and 2026.

The power producer’s wind-heavy portfolio enables greater consistency of renewable energy supply, resulting in enhanced cost savings and environmental benefits.

“This (deal) represents a key step towards fulfilling our mission of accelerating the roll-out of new renewable energy capacity in SA in a way that creates value for our customers and has a positive impact on the country and our planet,” said Reyburn Hendricks, director for Etana Energy.