Petra Diamonds, a London-listed company, is poised to achieve substantial cash savings of $75 million in the 2024 financial year following the initiation of a sales process for the Koffiefontein diamond mine in South Africa’s Free State province.
The company has raised its cash savings goal for the 2025 fiscal year to over $30 million through various cost-saving measures, including potential retrenchments.
Having entered a sales agreement with rough diamond trader Stargems earlier this year, Petra aims to streamline its operational requirements and rebalance its cost structure towards a more sustainable capital profile, avoiding closure-related expenses estimated at $15 million to $18 million.
In its interim results for the first half of the 2024 fiscal year, Petra set aside provisions totaling $23.1 million for liabilities and commitments associated with Koffiefontein.
As part of its group restructuring efforts, Petra has issued Section 189 notices under South African labor regulations, initiating consultations regarding affected roles across its operations.
At the Finsch mine, throughput tonnage revisions necessitated a review of continuous operations shift configurations, while cost-saving targets at the Cullinan mine are based on current throughput tonnages.
These strategic measures are anticipated to yield sustainable annual operating cost savings exceeding $30 million starting from the 2025 fiscal year. Petra will unveil detailed revisions to its life-of-mine plans and capital profile by the end of June.
Petra’s operational footprint includes the Finsch and Cullinan mines in South Africa, along with the Williamson mine in Tanzania.
