PERTH (miningweekly.com) – Operations at the Ellendale diamond mine – the home of rare fancy yellow diamonds in Western Australia – have been suspended, and owner Kimberley Diamonds has called in administrators to the subsidiary holding the mining licence.
The company said on Thursday that lower recovered grades and lower size distribution had negatively impacted on the revenues of its Kimberley Diamond Company (KDC) subsidiary. A sharp decline in the rough diamond market also saw the company achieve significantly lower-than-expected prices at a recent auction held in Antwerp.
Kimberley Diamonds noted that despite a number of successful cost-cutting initiatives at KDC, the subsidiary was unable to remain solvent, and the board had resolved to place the subsidiary into external administration.
The voluntary administration would not apply to Kimberley Diamonds or its other subsidiaries, which hold interest in the Lerala diamond mine, in Botswana, and the Lomero-Poyatos project, in Spain.
At the end of June, Kimberley Diamond secured a A$10-million loan from China-based auction house Zhejiang Huitong Auction to recommission the Lerala project.