"Reckless" South African Mine Running out of Cash
May 28, 20
(IDEX Online) - South Africa's small state-owned diamond miner Alexkor is trading recklessly and will run out of money within a month, a parliamentary committee heard.
The company, which operates around Alexander Bay (pictured), on the country's West Coast, is technically insolvent, warned former administrator Lloyd McPatie.
"I propose as a department that we need to look at liquidation of Alexkor because the company is not a going concern and it cannot generate cash flows to trade itself out of the current situation," he said.
Alexkor uses more than 100 contractors, who take a large split of diamond proceeds because of risky mining conditions and poor geological information.
Diamond sales of 67,724 carats in 2019 generated a total revenue of R412m against budgeted figures of 76,900 carats and R524m revenue. Production in 2018 was just 41,941 carats, against a budgeted figure of 58,000 carats.
The government's Department of Public Enterprises is now considering the best options for Alexkor and the pooling and sharing joint venture in which it has a 51 per cent stake with the Richtersveld Mining Company.