JOHANNESBURG (miningweekly.com) – Aim-listed Richland Resources has temporarily suspended mining activities at its Capricorn sapphire mine, in Queensland, citing extreme weather conditions and a weak market environment.
The company said on Monday that it had decided to halt operations to conserve cash resources, as heavy rainfall continued to hamper production efficiency. Since the start of October, the Capricorn site has had about 271 mm of rainfall, compared with 35.6 mm in the fourth quarter of last year.
“Continued operational interruptions caused by the far higher than normal rainfall, coupled with weak market demand and pricing conditions, have led the board to decide to temporarily halt mining operations and instead focus on further mine resource identification work,” Richland reported in a statement.
The company added that the Capricorn mine was a small, modular operation, which could easily be restarted. It is currently aiming to resume operations in the first quarter of next year.
The sapphire market has also suffered from an influx of stones illegally mined in Madagascar, which Richland has previously warned about.
CEO Bernard Olivier said that the company continued to pursue more strategic sales events with its stockpiled products, pending an improvement in the market environment.
The December sales event will involve rough and cut stones, with the result dependent on then prevailing market prices and demand and whether minimum reserve prices are met.
The temporary suspension of mining activities will also allow Richland’s Queensland-based team to evaluate further potential project opportunities in the region. The company is assessing two projects in the state.