Petra's Cullinan diamond mine in Gauteng.
JOHANNESBURG (miningweekly.com) – London-listed Africa-focused Petra Diamonds announced on Monday that the historic Koffiefontein diamond mine would be placed on care and maintenance.
As reported by Mining Weekly in May last year, Petra was exploring a responsible exit from its investment in the Koffiefontein diamond mining operations, together with black economic empowerment partners Kago Diamonds and the Itumelang employee trust. Petra Diamonds owns 74% of the asset, Kago 14% Itumeleng 12%.
The view expressed by Petra at the time was that it might be feasible for another owner to extend the mine’s life, but a buyer has not been found and the mine, situated in the Free State province, about 80 km from Kimberley, will now be shut.
“The board, in ongoing consultation with its stakeholders, has taken the difficult decision to cease operations and place Koffiefontein on care and maintenance,” Petra CEO Richard Duffy stated in a release.
“Engagement with our key stakeholders remains constructive as we seek to ensure an inclusive and responsible process towards mine closure,” said Duffy.
The asset has been loss-making for several years and low morale remains a risk to the mine’s safety performance.
A Section 189(3) notice was issued to Koffiefontein employees last year informing them of the economic realities of the mine and inviting them to join a collaborative process to determine the optimal way forward towards achieving the mine being placed on care and maintenance. Operations were halted to ensure assessed risks were mitigated.
LOWER GRADES AT CULLINAN
In the six months to the end of December, Petra’s total diamond production decreased 21% to 1.4-million carats owing to lower grades at the Cullinan mine, in Gauteng, lower tonnes mined at Finsch mine, in the Northern Cape, and production suspensions at Koffiefontein and at Williamson mine, in Tanzania.
The half-year revenue of the London-listed company amounted to $212.1-million, compared with $264.7-million in the corresponding six months of 2022, on total rough diamond sales of $210.7-million.
Gross debt decreased to $241.7-million from $366.2-million in the corresponding six-month period.
At Finsch, improvements to equipment and tunnel availability resulted in an increase in run-of-mine grades from December, at Cullinan, the C-Cut CC1E project under development is further expected to contribute higher grade tonnes from the end of the 2024 financial year, and at Williamson, a swift response to the regrettable tailings storage facility breach of 7 November 2022 was underpinned, Petra said, by relationships at both government and local level, as well as a robust governance framework.
Production guidance for the next two financial years has been revised downwards from 3.3- to 3.million carats for each of these years to circa 2.8-million carats for 2023 increasing to up to 3.3-million carats in 2024.
Petra, a supplier of gem rough, manages a diamond resource base of well over 200-million carats.