Friday, March 24, 2017
Clifford Elphick

Clifford Elphick

Gem Diamonds

2017 is a big one for Clifford Elphick’s GEM Diamonds, a do-or-die moment following the failure of its $95m Ghaghoo mine to meet operational targets last year. This must come as a bitter disappointment: after a series of missteps aimed at internationalising GEM. Elphick was desperate to make a success of Ghaghoo, based in Botswana, but the company was forced to write-down the operation for $40m at the half-year last year, a development Elphick complained was partly owing to bad luck, a decline in diamond prices, and the fact the mine hasn’t had a period when it could build up to full production without interruptions. A water ingress was one such problem with which it had to contend. As it stands, Letseng is GEM’s reliable mainstay, the historic, high-yielding mine perched some 10,000 feet above sea-level in Lesotho’s Maluti mountains. It, too, was not without mishap after snowdrifts and severe winds hammered the mine, blocked access, and took down power lines. The mine did benefit from a plant optimisation, however. For all the buffeting, GEM paid a dividend of some five US cents per share and has declared payouts would continue going forward. Elphick has a stake in the Zanaga Iron Ore project in Congo Republic: his partner, Glencore, is reluctant to take up greenfields projects, however, so it’s likely previous plans for the $2.2bn first phase will continue to collect dust.

LIFE OF CLIFFORD

Clifford Elphick made his name at Anglo American where he was quickly identified as one of the bright lights. He was appointed as Harry Oppenheimer’s personal assistant, rising quickly to MD of E Oppenheimer & Son, the family company in 1990. He was a director at Anglo American and was on the De Beers executive committee between 2000 and 2004 after it was taken private. He formed Gem Diamonds in 2005.

“We recognise we have only a short period of time to make this work and this is the reality of Ghaghoo.”