Is Cullinan diamond mine being sold? Print E-mail
News - Aktueel
Saturday, 19 September 2020 07:00
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Owner of Cullinan diamond mine, Petra Diamonds’ announcement of a formal sale process was met with anxiety from employees, the surrounding community, business and labour partners.

In the company’s August ‘Community Flash’ newsletter, general manager of Cullinan mine, Jaison Rajan, said that the effects of depressed diamond prices has burdened the mine’s profitability for over a year and that the pandemic has exacerbated the mine’s financial position.

In June the company declared its intentions to review its capital structure, in essence its debt. As part of this process, the company announced a formal sale process.

“In difficult times, it is important to focus on what you have as opposed to what you stand to lose,” Jaison said. “We have a world class asset that has thrived for over a 100 years producing special high quality diamonds. Most importantly, we have a high quality and skilled work force which places this operation as solid performer in the Petra Diamonds stable.”

In the same newsletter, Petra Diamonds Southern Africa’s CEO, Richard Duffy, said that the company’s board is required to test potential interest from external parties to acquire the company or parts of it.

He said that this does not mean that Petra or any of its assets will have to be sold. “If any offers are received from third parties as a result of this, these will be compared to the other options currently being considered to determine what is in the best interest of Petra and all its stakeholders (including employees).”

Richard said that the company has secured sufficient funding to meet its current operational requirements and it is confident that it will continue to do well in future, once the diamond market recovers.

According to the July ‘Rapaport Research Report’ Petra missed an interest payment on its $650m (R11.25bn) bond in May, but managed to negotiate an extension to May 2022.

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