Petra Prepares to Close Loss-Making Koffiefontein Mine
January 17, 23
(IDEX Online) - Petra Diamonds announced yesterday that it had taken the "difficult decision" to put its loss-making Koffiefontein mine, in South Africa, on care and maintenance as it prepares for complete closure.
The UK-based miner said it had failed to find a buyer for the underground deposit, which dates back to 1880 and which was expected to reach the end of its life in 2025.
"Production at Koffiefontein will remain halted while we continue to engage with our key stakeholders to determine the optimal way forward in moving towards placing the mine on care and maintenance as part of finalising a responsible process towards mine closure," the company said in an operating update.
Petra has revised down production guidance for this financial year to circa 2.8m carats and from 3.0m carats to 3.3m carats for FY 2024, which includes the impact of lost production at Williamson, closed due the breach last November of a tailings dam, and at Koffiefontein.
Those reductions take account of "cessation of production at Koffiefontein during H1 FY 2023 of c. 40 kcts p.a. for both FY 2023 and FY 2024".
CEO Richard Duffy said: "Engagement with our key stakeholders remains constructive as we seek to ensure an inclusive and responsible process towards mine closure.
In an operating update Petra said: "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 all KDM (Koffiefontein Diamond Mine) employees during November 2022 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 all assessed risks were adequately mitigated for. Our consultations with the mine's key stakeholders remain constructive and we are optimistic that an inclusive and responsible process towards mine closure will be achieved. As a result, further production from Koffiefontein has been removed from our updated guidance."
Pic of Koffiefontein, courtesy Petra Diamonds