Petra Diamonds says no production impact after 3 million tons of rock collapse into open pit

Cullinan, Petra Diamonds

PRODUCTION would be disrupted for a day at Petra Diamonds’ Cullinan mine, east of Pretoria, following a “scaling” incident at the mine’s open pit section, but the company did not anticipate a significant impact on output numbers.

Petra has guided to full year production of about 3.8 million carats.

Scaling, normally used to refer to the removal of loose rock from a mine roof or wall, occurred over the weekend following a thunderstorm. An estimated three million tons of rock collapsed into the Cullinan open pit creating a plume of cloud that extended to underground areas of the mine where Petra is operating.

Mining of the open pit stopped 50 years ago. However, the wall deterioration will be a safety and environmental concern for the company.

“We will take whatever steps are necessary, including the engagement of external technical specialists if required, to better understand this incident and any impact on future pit stability,” said Richard Duffy, CEO of Petra.

“The safety of our employees and surrounding communities continues to remain our key focus. Our meetings with our partners in government, labour unions and the community earlier today were very constructive and their valued input is appreciated,” he said.

Petra said it had met with the Department of Mineral Resources and Energy (DMRE) as well as unions with the outcome being that the mine “… is being disrupted for approximately one day in order to give management the opportunity to thoroughly inspect the underground workings for any anomalies and to complete a risk assessment before allowing operations to continue”.

The nearest Cullinan community is on the south eastern corner of the pit and ongoing monitoring of the pit walls show no unusual movement, said Petra. “As a result, we do not foresee any risk to the larger community,” the company said.

Shares in Petra were largely unaffected by the announcement, but the company has endured a rough ride. On a 12-month basis, the share is 79% weaker as prices for diamonds have fallen at a time the company needs cash flow in order to lower debt.