Picture: THINKSTOCK
Picture: THINKSTOCK

ALL of Rockwell Diamonds’ employees had been issued with section 189 notices on Tuesday, the miner said in its November quarter production update released on Thursday.

Its sales plunged 66% to $5.3m during the third quarter of its financial year, from $15.8m in the matching period last year. Diamonds sold went down 71% to 4,021 carats from the previous year’s 13,759 carats as production fell 61% to 3,990 carats from 10,228 carats.

Rockwell will close its Saxendrift mine by the end of next month with the planned transfer of crucial skills and infrastructure to its Wouterspan mine, CEO James Campbell said.

The average carat price realised from its Middle Orange River projects declined by 28% quarter-on-quarter to $1,295 per carat, reflecting general market weakness.

Its problems were compounded by a two-week shutdown at its Remhoogte-Holsloot Complex after a fatality.

"This meant that we did not achieve the 1-million cubic metres processing volumes generally necessary for the recovery of large stones," Mr Campbell said.

"At Saxendrift, we continued to process middlings material, which had been dumped by a previous operator in order to defer closure of this operation, which is now reaching the end of its economic mine life.

"This resulted in a lower average stone size and commensurate reduction in realised average carat values."

The recommissioning of Wouterspan was expected to be completed in about a year at a cost of R43m. The redeployment of existing processing and mining equipment from Saxendrift, Niewejaarskraal and Remhoogte will enable the construction of a 200,000 cubic metres a month operation, with little need for new equipment; accordingly the budget is composed mostly of relocation and set-up costs, Thursday’s statement said.

"Consultation processes have commenced internally and the outcome will affect a number of employees, with the real impact to be assessed during the consultation process."