Alexkor to restructure, eyes new ventures in Southern Africa

17th October 2011 By: Henry Lazenby - Creamer Media Deputy Editor: North America

JOHANNESBURG (miningweekly.com) – State-owned diamond miner Alexkor on Monday said it would restructure in a bid to reap greater dividends from its current operations, and would engage new projects in Southern Africa.

Chairperson Reginald Muzariri said the company was in an operational “limbo” with regard to its land-based mining rights, while a land restitution claim was being settled with the Richtersveld community.

During this time, Alexkor focused on its shallow-water marine operations off Alexander Bay, and by sweeping and reprocessing the tailings dump at its mine.

Having collected a ring-fenced amount of more than R200-million from the Department of Public Enterprises (DPE), exploration work is expected to begin soon in an effort to get the land-based mining operations on track again. Muzariri said land operations were halted to protect the resource value for the community, until the land dispute was settled.

“We only expect the first dividends from the pooling-and-sharing joint venture (PSJV) company, comprising Alexkor and the community-owned Richtersveld Mining Company (RMC), to be paid out in about five years time, while the community would receive royalty payments from the diamond production in the meantime,” he said at a media briefing.

Muzariri said that Alexkor and RMC would now function largely independently of each other, each comprising its own management structures. The State-owned firm would retain a 51% holding in the PSJV to provide the necessary financial backing and to facilitate skills transfer.

It would assume a strategic oversight function in starting up new mining ventures within South Africa and the Southern African Development Community, and was already in negotiations to pursue possibilities in Angola, the Democratic Republic of Congo and Zimbabwe.

With acting CEO Berno Lategan at the helm, who has the ‘required skills set’ to move the company forward, Alexkor hoped to create maximum returns for its shareholder, the DPE.

Alexkor would now focus on securing new projects, but stick to what it knows best by acquiring and starting new alluvial diamond mining projects.

Meanwhile, the company said it did not expect to be incorporated into State mining company, the African Exploration Mining & Finance Corporation (AEMFC), within the foreseeable future. Alexkor would continue to focus on alluvial diamond mining, while the AEMFC would pursue other commodities, such as coal.

Alexkor made an operating profit of R11.3-million in the 2011 financial year.