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Firestone Faces Uncertain Future
Jan 13, 2021 8:57 AM
By Leah Meirovich
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RAPAPORT... The continued operation of Firestone Diamonds is in question amid an extended shutdown of its mine in Lesotho and heavy debt.
The miner will keep its Liqhobong deposit closed until it can work out a deal to restructure the more than $80 million in debt it owes ABSA bank, it told Rapaport News Wednesday.
“We are in discussion with our debtholders to restructure our balance sheet, which is a prerequisite to restarting the mine,” said Firestone CEO Paul Bosma.
The company is also waiting for the market to recover from the blow Covid-19 caused to rough prices. When the miner put Liqhobong on care and maintenance in April, rough prices had made it economically unviable to continue producing diamonds.
In November, Firestone tested its first parcel of rough since the shutdown. Those stones achieved an average price above $75 per carat, which was the pre-coronavirus level, thanks to the inclusion of a few special stones, Bosma noted. However, prices for run-of-mine rough were on par with those seen before the pandemic.
Firestone plans to test prices on a second batch of rough during the first quarter of 2021. The results of that sale, as well as the restructuring discussions, will determine the mine’s future. They will also affect the fate of the 170 workers the company laid off when it closed the site.
“We hope to have concluded [the restructuring] discussions by mid-2021 at the latest,” Bosma added. “The employees that were retrenched will have first preference for employment if the mine restarts.”
Image: The Liqhobong mine. (Firestone Diamonds)
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Tags:
ABSA Bank, COVID-19, Firestone, Firestone Diamonds, Leah Meirovich, Liqhobong, Liqhobong mine, Paul Bosma, Rapaport News
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