Ekapa Mining, the only major diamond mining firm operating in South Africa’s Kimberley region, has imposed a three-month, 12.5% salary cut across the board, in a bid to stay afloat in the face of slumping diamond prices and renewed problems with illegal miners on its property, according to local media reports.
The operation was formerly run as a joint venture with Petra Diamonds, which sold its 75.9% controlling stake in July last year to partner Ekapa for R300 million.
Kimberley Ekapa Mining (KEM) said in a statement seen by MiningMx that the current crunch in the global diamond market, which has hit small diamond prices particularly hard equates to an approximately 20% year-on-year price decrease in dollar terms for the company’s mining operations.
KEM chief executive Jahn Hohne said they had initially proposed a 25% wage reduction that was strongly rejected by the National Union of Mineworkers.
The union also rejected the 12.5% cut now imposed despite management’s commitment that the reductions will be repaid.
Meanwhile, Hohne said KEM is spending R3 million a month on security measures to keep illegal miners off mine property.
“They are using force; trespassing; conducting illegal mining; sabotaging mine infrastructure and allegedly being supported by illegal diamond traders,” said KEM.