JOHANNESBURG (miningweekly.com) – JSE- and TSX-listed Rockwell Diamonds is revising the mine plan for its Tirisano operations, in the North West province, as start-up pressures hamper the diamond mining company’s overall performance.
The turnaround strategy, which aimed to reduce the operating cost structure of the mine, would include “substantial” retrenchments, CEO and president James Campbell told Mining Weekly Online on Friday.
He declined to comment on the number of employees affected, but noted that the necessary regulatory processes started on Friday and that negotiations with trade union representatives would get under way next week.
“We see this as a short-term hiccup, and we firmly believe there is a long-term quality resource [at Tirisano], so we are just taking decisive, quick, corrective action in the light of current economic circumstances,” Campbell commented.
This followed Rockwell’s first-quarter loss of C$3-million as a direct result of the C$2.5-million start-up expenses at Tirisano and a decline in diamond prices. Smaller-than-average diamond stone sizes also negatively impacted on the mine’s revenue, despite a doubling in carat production for the three months to May.
As part of the implementation of the new mine plan, the group placed the “large and complicated” processing plant, which limited mining to a less clay-rich area, on temporary care and maintenance, while a small fit-for-purpose plant would be constructed to align with the company’s newly commissioned wet front-end technology. The new technology would allow the mining of higher-grade gravels with a higher clay content.
Mining operations would be shifted from pits two and three, to pit four, which would enable the recovery of resources closer to the surface, reduce stripping ratios and recover diamonds of a grade “more in tune with where the current markets are”, Campbell said.
Rockwell expected to see improvements at the operation during the third quarter of the 2013 financial year and believed the mine would be back on track by the next financial year.
Meanwhile, Rockwell reported production of 7 234 ct in the first quarter of its 2013 financial year and said it sold 6 234 ct at an average price of $944/ct.
The Saxendrift mine, near the Middle Orange river, in the Northern Cape, delivered a “much-improved” performance with a 39% increase in volume production and a 26% increase in carats.
The company’s Klipdam operations, near Kimberley, achieved a 20% increase in production and recorded a 51% year-on-year increase in carat production.