Rockwell Diamonds Inc. (RDI) announced on Wednesday that it had decided to place its operations at the Tirisano Mine on care and maintenance following persistent industrial relations issues and ongoing losses incurred by the mine.

The term “care and maintenance” is used when a mine has stopped production and is temporarily closed for technical‚ environmental‚ financial or labour relations reasons (Minerals Act‚ 1991).

The Tirisano Mine‚ last week‚ was impacted by a second unprotected (illegal) strike within a period of four months. It has also been subjected to persistent industrial relations issues relating to pay increases despite the fact that the mine has continued to operate at a loss and these issues being dealt with in full compliance to the Labour Relations Act (LRA) of South Africa.

“The mine’s challenges have been exacerbated by operational complexities as well as a slower than anticipated recovery in the price of smaller diamonds that make up much of Tirisano’s production profile‚ that led to the persistent poor financial performance. The burden of these losses has been carried entirely by Rockwell whose black economic empowerment (BEE) partner at the mine‚ Mogopa Minerals‚ has been unable to contribute any funding since the mine’s inception.”

“Accordingly‚ the board of directors has approved a decision to place the mine on care and maintenance in order to preserve the cash resources of the company‚” Rockwell said in a statement.

It added: “Rockwell remains confident in the resources of the property and‚ as such‚ a detailed metallurgical study is planned at Tirisano while the mine is on care and maintenance to design a fit for purpose plant that is specific to local conditions.”

“Royalty mining revenues will be used to offset the care and maintenance costs. With the addition of further royalty mining contracts‚ Rockwell anticipates a cash neutral position with regard to these costs.”

“The decision to place Tirisano on care and maintenance has not been taken lightly and was only made once all possible avenues were explored to operate profitably using the existing infrastructure‚” said James Campbell‚ CEO‚ Rockwell Diamonds.

“Rockwell is committed to providing jobs in areas that are impacted by high unemployment rates and we are disappointed that these decisions will result in inevitable job losses at the mine; however‚ the financial position of the company has to be our main priority. We are also working with Mogopa Minerals to secure funding to enable them to meet their financial obligations in relation to Tirisano.”

With regards to the future‚ Campbell explained: “Our planned metallurgical studies at the mine are aimed at designing a fit for purpose operation that will create value for all stakeholders in the future. As a team‚ we have also dedicated significant management time to turning the mine around‚ which has now been freed up to focus on our high potential projects in the Middle Orange River region that are the growth engine of the company.” - I-Net Bridge