Flooding shuts diamond mine

A couple selects diamond rings at a jewellery store in Shanghai. File picture: Aly Song/ Reuters

A couple selects diamond rings at a jewellery store in Shanghai. File picture: Aly Song/ Reuters

Published Nov 14, 2016

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Johannesburg - DiamondCorp said on Monday it had suspended all production activity at its Lace Mine in the Free State.

This is after last week's heavy rains, which flooded the open pit mine, a move that could see the struggling miner lose millions of rand.

The Southern African diamond mining, development and exploration company may now have to wait 3 months before production resumes as it begins to pump out the water from the level where production takes place.

This comes after two extreme thunderstorms passed over the Lace Mine, dropping almost 90mm of rain in just over an hour late Friday afternoon.

Read also:  DiamondCorp resumes Lace operations

The rain equated to almost one third of the mine's annual rainfall.

In total, DiamondCorp said more than 10 000 cubic metres of water was estimated to have entered the mine through the open pit and access ramp.

The diamond miner said this overwhelmed the mine's pumping systems and flooded the 310 metre production level to the hanging wall. “To pump the production level dry will take at least a week assuming no further material rainfall,” DiamondCorp said. “However, once the level is dry, no production will be possible in the short-term as the longhole drill rig which was operating at the time of the flood will need to be recovered and the electrics rebuilt. This could take up to 12 weeks from the time of recovery.”

DiamondCorp said management was investigating all options as a consequence of the flooding and its impact on the group's financial position, and was consulting a business rescue practitioner for the company's operating subsidiary. The miner was recently dealt a blow when the Department of Mineral Resources issued it with a Section 54 shutdown notice on underground operations following a fire incident on a dump truck just inside the portal to the decline.

Last week, DiamondCorp successfully concluded a financing facility with London-based independent investment managers, Rasmala, to satisfy the company's immediate funding requirements which nearly saw it not continue trading as a going concern.

The miner on Monday requested a suspension of its shares from trading on both the AIM Market of the London Stock Exchange and on the Alternative Exchange of the JSE respectively, pending clarification of its financial position.

AFRICAN NEWS AGENCY

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