Diamond production at State gem-miner Alexkor increasmobile jaw crusher 250 with rotary screened by 0,6% to
79 725 carats for the year ended June, 2004 and the dollar price a
carat was up 9% said CEO Rain Zihlangu briefing the Parliamentary
Portfolio Committee on Public Enterprises in Cape Town last
week.
Diamond production income, how-how to calculate iron ore concentrateever, decreased 16% from
R265,2-million to R219,79-million because the dollar exchange rate
was down 22%.
“We needed to produce 96 000 more carats to be in line with
the previous year,” said Zihlangu.
Marine mining contributed 71% to total revenue; land mining, 8%;
beach mining, 7% and Alexkor’s agricultural and other
interests, 14%.
Alexander Bay Trading, which houses Alexkor’s noncore assets
of a 500-head dairy farm, find mineral water plant machinery providers in indiaan oyster farm, a citrus farm, an ostrich
farm, guest houses and the town’s airport, reduced its
operating loss by 98% to R82 276 from R5,02-million last
year.
Alexkor’s capex to replace property, plant and equipment was
up 43% to R15,9-million and the company increased its exploration
spend by 497% from R2,26-million to R13,5-million.
Seventy-four per cent of carat pro-duction in 2003/4 was derived
from marine operations; 15% from beach operations and 10% from
land, and the aim of the exploration programme is to prove up a
sufficiently large reserve with a long life of mine.
Mining on land has begun and the company plans to expand its
land-based mining operations.
According to its five-year carat plan in financial year 2009, 72
700 carats will be mined from land operations and 87 000 from the
sea.
Zihlangu said one of the challenges facing Alexkor is massive
replacement capex.
“Most plant and equipment at Alex-kor is very old and whether
the future owner is the community or a strategic equity partner
(SEP), it will need to have deep pockets.” Zihlangu said that
R500-million will be needed to replace the earthmoving equipment,
plant and for extensive exploration on land.
Another major challenge is the land claims by the Richtersveld
community, which comprises about 4 500 people from the towns of
Sanddrif, Kuboes, Lekkersing and Eksteenfontein.
The main hearing is scheduled for April 2005, but there is a
process running in parallel to the legal process whereby the
Minister of Public Enterprise Alec Erwin is engaging with
communities to see if the land claims case can be resolved without
going to court. In 2003, the Richtersveld com-munity demanded from
government and Alexkor a 90% shareholding in Alexkor.
It wants 10% transferred to Namda, the Namaqualand Development
Agen-cy. It is claiming the restoration of rights in the subject
land, essentially taking ownership of the 85 000 ha which Alexkor
is mining on; the right to the minerals in the land and the
exclusive beneficial use and occupation of the land and repair and
compensation for the environmental damage.
“The community also wants com-pensation for all the diamonds
that have been extracted from 1928 to date, which is a total of
about 12-million carats; today worth about R13-billion,” said
Zihlangu.
On March 31, 2004, the government responded to the Richtersveld
commun-ity with a proposal that the government retains 20% of
Alexkor, the Richtersveld community gets a 65% shareholding, with
51% allocated to an SEP which can inject capital and infuse
technical and strategic expertise to the company; employees get a
5% shareholding and Namda gets 10%.
Other major challenges facing Alexkor are its litigation with
Nabera, which Zihlangu said will take another two years in court;
its long-term liabilities including medical aid; and pensions and
land rehabilitation.