Rockwell in fresh round of restructuring

[miningmx.com] – DISTRESSED alluvial diamond mining firm, Rockwell Diamonds, is to shut its Johannesburg office and has issued employees with notices that it intends to further restructure its business in an effort to save costs.

The Toronto- and Johannesburg-listed diamond producer said in an announcement that it would transfer Johannesburg-based employees to its operations in the Middle Orange River in South Africa’s Northern Cape province.

This initiative, which is part of a broader strategic review aimed at surviving the dip in the rough diamond price and as it switched over to more profitable operations, would save it an estimated R7.9m a year.

It also said it would terminate company-directed operations at its Saxendrift mine, also in the Middle Orange River, by February. It would also streamline its reporting structures and make mine management directly responsible for operations.

“The current level of diamond recovery, grade and volumes processed are an ongoing area of concern across Rockwell’s operations,” Rockwell Diamonds CEO, James Campbell said in a statement.

“As a result, it has been challenging to achieve financial viability, growth and profitability, which have directly impacted the company’s human capital requirements, and sustainability. Accordingly a decision has been taken to restructure the workforce company-wide,” he said.

A period of consultation with employees would begin and that it would affect “a number of employees” said Campbell.

The company announced in July that it had suspended operations at Niewejaarkraal, the sustainability of which would now be assessed amid high stripping costs – a decision that follows the closure of its Saxendrift Hill Complex.

Rockwell Diamonds had also recently sold its Tirisano mine but had replaced diamond production from its restructuring with Remhoogte and Holsloot, two operations bought in the C$21.9m acquisition of Bondeo.

In the third quarter, Rockwell booked a 48% decline in processing volume to 797,000 cubic meters year-on-year. Carats produced fell 61% to 3,990 and the average grade slumped 25% to 0.50 carats per hundred cubic meters.

Diamond sales fell 66% to $5.3m and volume sold dived 71% to 4,021 carats. The average price increased 16% to $1,328 per carat.

1 COMMENT

  1. The Rockwell Diamonds Annual Results have just been published on SENS, 31 May 2016.
    Please find my view on same.
    Another poor set of the (as usual) same results tainted by failure. With the usual spin.
    It has been clear for several years that the corporate CEO and layered management at Rockwell do not know how to run this type of operation on this particular Orange River mining area (on more than adequate orebodies) where mining and metallurgical technology, precision and controls are required and where entrepreneurial thinking should be part of the mindset. This is not gold in West Africa. This has nothing to do with the commodity cycle or anything else. The orebodies are not to blame, the Board and management are out of their depth here. Why do they always manage to avoid taking responsibility for poor results?
    The corporate types who run the company simply do not have any idea of what it takes to operate in this environment. They may have had success elsewhere, but have never had and will never have success here. All over this diamond field the founders and competent operators were prematurely removed by cufflink directors and smooth talking promotors (with a promised “turnaround” and in self-interest) 8 years ago. 8 years later, where is the turnaround? Only spin, wasted capital and excuses.
    An “unqualified” set of results from the Auditors tempered with two “uncertainties” (plus debt and an overdraft facility) on which we are advised that management (who have a record of non-delivery) will remove by increased performance?
    Yes, sure, you would have us believe you. Do you take the shareholders for idiots? Going concern here is a definite issue. Too little, too late.
    One big ego that has become narcissistic, prescriptive and in his mind a font of “know-how” coupled with subservient, out of their depth (and bullied) corporate management who will never understand the environment, equal this unfortunate situation.
    Where is the Board? Where are the other shareholders? Is this acceptable to them? Other management teams have been removed for less. Where is the analytical reporting by the Press? No more glowing stories on this site on the greatness of “the man”? Such a pity.
    Time for CHANGE please. Time to think of the shareholders. And please do not replace management with the usual “Corporate” types.

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