Feb 21 - Petra Diamonds said it was positive for its full-year due to strong demand for rough diamonds as it posted in-line profits for the six months to end-December.

Blue diamonds

The AIM-listed company said the diamond market continued to strengthen in 2011 and that it saw the average price for its rough diamonds rising 6-8 percent at an auction this month, excluding the proceeds from the sale of a $4.7 million stone.

Petra is on track to produce about 1.3 million carats in the current financial year and register a healthy increase in revenues, Chief Executive Johan Dippenaar told Reuters on Monday.

He added that the group was concentrating on value production and not on producing carats at all costs.

The group's unit costs remained flat despite inflationary pressures mainly due to higher electricity and labour costs.

Numis Securities said the results were in line with the consensus and that overall they were a positive reinforcement of the company's growth story.

Net profit in the six months to end December fell to $24.5 million from $37.9 million as output declined partly due to a planned expansion at the Williamson mine.

In January, Petra announced the acquisition of the Finsch diamond mine from the world's largest diamond producer De Beers. It expects the acquisition to boost annual production to around 4 million carats by FY 2014 and to more than 5 million carats by FY 2019.

Finsch -- South Africa's second-largest diamond mine by output -- will become Petra's eighth mine.

"We are not at the moment looking at any other acquisitions," Dippenaar said.

The company, the largest diamond producer on London's junior AIM market, said it had been busy with ground work regarding a move to the main market. Petra said it could move up between July and December this year if it decided to go ahead.

The shares were up 0.3 percent at 0931, in line with a British mining index.

By Julie Crust
(Editing by Rhys Jones and Jane Merriman)