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Alexkor focus only in SA for now, says acting CEO
By: Idéle Esterhuizen

JOHANNESBURG (miningweekly.com) – State-owned diamond miner Alexkor was exploring opportunities beyond its Alexander Bay mining operations, in the Northern Cape, acting CEO Berno Lategan confirmed Friday.

"We are looking at other diamond-related operations elsewhere in the Northern Cape and in the North West," he told Mining Weekly Online at a media briefing in Pretoria. However, Lategan stated that while Alexkor was currently not exploring any opportunities beyond South Africa, this could happen in the future. "We first want to get our local operations up and running; when they are successful we will look beyond South Africa."

Public Enterprises Minister Malusi Gigaba expressed confidence that the company's new board of directors would be able to secure significant operating assets in the next 24 months. He announced that Rafique Bagus had been named chairperson, while other board members were Gillian Jiyane, Yvonne Mohutsioa-Mathabathe, Zukiswa Ntlangula, Mohammed Bhabha and Roger Paul.

"I am convinced that funding from the open market for viable and sustainable diamond mining assets and operations will be available," the Minister added. The new board was also tasked to fill the position of Alexkor CEO within the next three months. Former CEO Khetiwe Maseko-McClain left the company in September last year, when her fixed-term contract of three years expired.

FINANCIAL PERFORMANCE

Gigaba said Alexkor had budgeted for a loss of more than R20-million for the 2011/12 financial year, but only incurred an actual loss of R16.4-million, owing to cost-cutting measures implemented. Contributing to the loss was the derecognition of assets valued at R7.8-million, as a result of the company giving up 49% of its Alexander Bay operations in a pooling and sharing joint venture (PSJV) with the nearby Richtersveld community.

The PSJV also resulted in a loss of R7.1-million, while Alexander Bay residents' nonpayment of rent and electricity amounted to R2.2-million. "We anticipate that the Alexkor Richtersveld Mining Company JV will continue to incur losses for at least the next three years, as we enter into a phase of exploration. No meaningful exploration has been conducted at the Alexander Bay operations since pre-2003, owing to the land claim instituted by the Richtersveld community," he said. However, Gigaba assured that Alexkor was able to meet its operating costs. In the previous financial year, the government had allocated R350-million to Alexkor to settle its outstanding liabilities.

TROUBLED INDUSTRY

The Minster said that although the impact of the labour issues that have plagued South Africa's mining sector should not be downplayed, it should also not be exaggerated. "The impact has been minimal, investors are confident that South Africa's leadership and unions will be able to handle the impact of the unrest," he told journalists. However, Gigaba warned that the current unrest in the platinum and gold mining industries could still hold far-reaching implications for the diamond sector as well. "If the unrests are prolonged the first casualty could be the investment appetite in the mining sector."

He said the government was equal to the task and would ensure that the sector was stabilised and that domestic and foreign investor confidence in the mining industry and the country was restored. "We are committed to ensure that a shopfloor accord is reached to meet the interest of all parties including workers," Gigaba stated, highlighting the importance of reviewing the relationships between companies and communities in which their operations were based. "We need to do some serious introspection in the mining sector and country in general," the Minister urged.


This article was published in:

Mining Weekly

 
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