JOHANNESBURG (miningweekly.com) – TSX-and JSE-listed Rockwell Diamonds is moving to contract mining at its Klipdam mine, near Kimberley, in a bid to lower operating cost and improve the operation’s overall performance.
The company concluded a three-year contract mining agreement with CML Operations and said it had entered into a sale agreement to sell Klipdam’s earthmoving fleet at book value over two years.
Rockwell would also make minor adjustments to the processing plant, but said the overall monthly capacity of the mine would remain unchanged at 100 000 m, providing sufficient resource for the contract-mining term.
CEO James Campbell said the appointment of a contract miner represented a “step change” in Rockwell’s operating model and that it would adopt a similar approach at the Saxendrift Hill mine, which was currently under construction.
“This significant development should enable us to focus on our core competencies, being the identification and proving of quality diamond resources and the concomitant recovery and marketing of high-value, gem-quality diamonds.”
The company said that the changeover would entail retrenchments, but added that the contract miner would need local skills.
Rockwell said it decided to shift to contract mining at Klipdam, as high unit costs and poor earthmoving and plant availabilities continued to negatively impact on the mine’s financial performance.
Klipdam, which had a three-year mine life left, had recently produced sporadic monthly positive cash flows, but its cumulative loss-making performance continued to negatively impact on the group’s overall performance.
Meanwhile, Rockwell also announced the resignation of COO Michael Hunt, effective from October 28.
The company said it did not plan to replace Hunt in the short term and that the mine managers and senior project manager would report directly Campbell, with the balance of the COO’s role being allocated among Rockwell’s executive management team.