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Alexkor's turnover almost halves

I-Net Bridge | Fri, 18 Dec 2009 15:35

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[miningmx.com] --TURNOVER of the state-owned diamond miner Alexkor has plunged by 42% since 2000, according to a written reply given in Parliament by Barbara Hogan the Public Enterprises Minister.

Answering a question from Philip Dexter of the Congress of the People Hogan said that this is primarily due to factors of price and volume reduction.

She explained that profitability from the diamond mining operations was erratic between 2000 and 2009 with profits recorded between 2001 and 2006 whilst losses were recorded in the latter years.

"Results differ materially due to fluctuations in diamond prices and foreign currency exchange rates," Hogan said. "The economic crisis negatively impacted diamond market prices and this resulted in reduction in the rand diamond revenues."

She told Dexter that the price of diamonds fell by a half in 2008 and 2009, and the effect was exacerbated by a decline in available sea days (days when safe mining can be conducted in the sea) from 79 in 2002/3 to 10 in 2008/9.

"Alexkor undertook a restructuring programme in order to contain costs," she said. "However, given the fixed nature of mining operational cost structure, Alexkor's cost structure could not be adjusted proportionately to the reduction in revenue."

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