PETRA Diamonds announced on Monday a five-year wage agreement with the National Union of Mineworkers (NUM) granting employees annual increases of 5.75% to 6.5% or an increase matching consumer price inflation, whichever is the greatest.
“We thank our partners in the NUM for their positive and constructive engagement in concluding this agreement against the backdrop of a challenging period for the industry,” said Richard Duffy, CEO of Petra.
“This allows for continued certainty on fixed labour costs at our South African operations and enables us to renew our focus on operational delivery as we continue to build further resilience in the business,” he said.
The increases, which are for employees in the A and B Paterson bands, are effective from July 1 this year to 30 June, 2029. As per the agreement, there will be a salary bump of 6.25% in the first year followed by a 5.75% lift in the second year.
Petra is facing a cash crunch amid poor prices for diamonds this year. In April, it issued a restructuring notice to employees at its Finsch mine in South Africa as part of efforts to reduce operating costs $30m a year starting in its 2025 financial year. This is better than the previous $10m/year target.
Nearly all the key fundamentals turned against the diamond miner in the six months ended December. It reported a basic loss per share of 4.87 US cents (previous comparable period – restated loss of 9.86 USc a share). Consolidated net debt jumped to $212.4m ($90.2m) and operational free cash flow turned to a negative $21.2m from a positive $12.5m.
On April 16 it announced it had repaid $23m of its revolving credit facility (RCF) to reduce interest costs while it also expected to avoid costs of between $15m and $18m provided for in its balance sheet at end-December related to environmental liabilities related to the Koffiefontein mine, since sold.
