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Rockwell Diamonds, NUM Reach Agreement

Nov 15, 2011 9:42 AM   By Jeff Miller
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RAPAPORT... Rockwell Diamonds  reached an agreement with the National Union of Mineworkers (NUM) to convert its Northern Cape operations, which include the Saxendrift and Klipdam mines in South Africa, into continuous operations. The application for the conversion has been submitted to South Africa's regulator and is supported by the NUM.  Once implemented, the mines will be operated through four shifts, seven days a week, and that is up from the current three shifts per day on a five day work week.

"We are pleased to have reached this agreement with the NUM as the conversion to continuous operations will have broad ranging benefits to all stakeholders once implemented," said James Campbell, the chief executive of Rockwell Diamonds. "This will lead to the creation of employment opportunities in the Northern Cape, which is currently burdened with a 43 percent unemployment rate. For Rockwell, it will be equally beneficial as increasing our production off the same fixed cost base will enable us to optimize the returns on our investments in our mines."

Klipdam mine's continuous operations will make it more feasible to increase the life of mine in the short to medium term while at Saxendrift, the measure could help improve margins. At the Tirisano mine, which went into production in mid-October,  continuous operations were  implemented at the start and is handled under a different contract.

A two year wage settlement with the unit representative of the NUM for the Northern Cape allows for annual wage increases of 8 percent and an adjustment should the consumer price index (CPI) exceed the agreed rate.  At Tirisano, the company has an existing wage settlement agreement, which will come up for renewal in June 2012.

"We reached a mutually agreeable settlement following a protracted negotiation process with the NUM," said Campbell. "We believe that the result was fair and equitable, taking into account the wellbeing of our workforce, but not to the detriment of our efforts to improve the financial performance of the company."

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Tags: Jeff Miller, labor, mining, num, Rockwell
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