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Rockwell to Close Johannesburg HQ in Restructuring
Jan 10, 2016 1:35 PM
By Rapaport News
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RAPAPORT... Rockwell Diamonds will
close its head office in Johannesburg and stop operations at one of its South
African mines as part of a strategic review to cut costs and improve cash flow.
The company has also issued all of its employees with retrenchment notices amid
a slump in processing, production and sales figures.
The
miner will transfer Johannesburg-based key senior executives to its operations in
the country’s Middle Orange River (MOR) region on a full-time basis, saving
about $484,097 (ZAR 7.9 million) per year, according to a statement January 7.
Rockwell, which is listed in Johannesburg, Toronto and on OTC
Pink in the U.S., will terminate “company-directed operations” at the
Saxendrift mine on the south bank of the MOR by February 2016.
Other plans include simplifying the operational reporting
structures and making mine management directly responsible for mine operations,
reporting to the MOR-based chief executive officer.
“The current level of diamond recovery, grade and
volumes processed are an ongoing area of concern across Rockwell's operations,”
the statement said. “As a result, it has been challenging to achieve financial
viability, growth and profitability, which have directly impacted the company's
human capital requirements, and sustainability.
“Accordingly
a decision has been taken to restructure the workforce company-wide. In line
with legislative requirements, as well as the company's consultative culture,
the relevant government bodies and employee representative bodies have been
informed. All of the company's employees were issued with Section 189 notices
on January
5, 2016.”
The consultation processes will affect “a
number of employees,” with the company making “every effort to minimize the
number of retrenchments and redeploy as many employees as possible.”
The
news comes amid a 48 percent decline in processing volume to 797,000 cubic
meters year on year for all of the company’s operations in the third quarter
that ended November 30. Carats produced plummeted 61 percent to 3,990 and the
average grade slumped 25 percent to 0.50 carats per hundred cubic meters.
Diamond sales fell 66 percent to $5.3 million and volume sold dived 71 percent
to 4,021 carats. The average price increased 16 percent to $1,328 per carat.
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Tags:
Canada, Johannesburg, Middle Orange River, Rapaport News, Rockwell Diamonds, Saxendrift, South Africa
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