The mine, which is still in talks with the National Union of Mineworkers over possible job losses, says it has become economically unsustainable and unviable as a result of the world market price reduction for rough diamonds. The CEO for Ekapa Minerals, Jahn Hohne, says the outcome of the discussion with the union will determine what happens next. He says there is a high need for an alternative business model that can be implemented immediately or the company could soon close its doors.

Hohne says the world market price reduction equates to an approximate 20% year-on-year price decrease in dollar terms for Ekapa’s mining operations in Kimberley. This is coupled with the about R3 million per month spent on security and infrastructure costs. He says the chances of a complete shutdown of the business are very high if urgent steps are not taken.

“We have been doing everything in our power to protect the jobs of our approximately 1 400 employees and another 600 people working on contract for the company. We have been working around the clock to find alternatives, including additional finance options, without success,” said Hohne.

He added that they are working closely with their staff members and represented trade unions to find sustainable solutions.

“The options we have left are to increase underground tonnage for increased revenue and significant cost reduction measures. Management therefore proposed that, apart from other reasonable steps to reduce costs, all employees across the board consider a voluntary 25% reduction of salary for a fixed term period of three months. The proposal was not arrived at easily. However, the situation is critical and management believes that every reasonable step needs to be taken in order to avoid a situation in which the business may have to close,” explained Hohne.

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