PETRA Diamonds was planning to cut 150 jobs at its Koffiefontein mine in South Africa’s Free State, according to statement by the National Union of Mineworkers (NUM).
“The NUM Kimberley Region can confirm that it had received Section 189 notice of restructuring/retrenchments from the Koffiefontein Diamond Mine,” the union said. “The company is reporting that approximately 150 jobs may or are impacted by this restructuring or retrenchment.”
Petra Diamonds was yet to confirm the union notice at the time of publication.
The UK-listed firm said in February it had turned the corner following a revival in rough diamond prices, as well as self-help efforts aimed at reducing net debt. “With the strong recovery in the diamond market and the actions we have taken, Petra is now also well placed for the future,” said Richard Duffy, CEO of Petra.
Commenting on Koffiefontein it said in its interim results presentation that the mine was expected to reach its end of life in depleting available reserves by the firm’s 2025 financial year. A restructuring was among the possibilities for the mine given it was losing money.
“Petra is considering its options to ensure a responsible exit while continuing to implement the outcomes of the BRE (business re-engineering) project aiming to curtail the negative cash flow impact on the group,” it said.
Petra said 2022 production was on track to meet guidance of 3.3 million to 3.6 million carats and capital expenditure is expected to be at the lower end of the guidance of $78m to $92m.
Commenting on the diamond market, Duffy said there had been “a structural change – not a bubble or a blip – and it is supported by supply/demand fundamentals. This suggests we will have a robust and supportive market going forward”.