Petra Diamonds Limited has announced an increase in its cost savings target to more than US$30 million per annum, as part of its efforts to build business resilience. The company aims to achieve this through capital deferrals and cost savings across its South African operations, centralised services, and overheads. Petra's CEO, Richard Duffy, emphasized the importance of aligning group support structures with operational requirements to enable sustainable net free cash flow generation.
The company has also entered into a definitive transaction agreement for the sale of its interest in the Koffiefontein Diamond Mine (KDM) to affiliates of the Stargems diamond group. This transaction, once completed, will provide ongoing economic activity in the region and relieve Petra from incurring closure-related costs of US$15-18 million. The sale is subject to obtaining the consent of the Department of Mineral Resources and Energy in accordance with South Africa's Mineral and Petroleum Resources Development Act.
In line with the cost-saving measures, Petra has issued S189(3) notices under the South African Labour Regulations Act to commence consultations around affected roles due to a group restructure. Additionally, proposals to revise throughput tonnages at the Finsch Mine and Cullinan Mine have led to consultations with affected employees and organized labor.
Petra is being advised on the sale by Questco Corporate Advisory and Edward Nathan Sonnenbergs Inc. as legal advisors. The company will provide further updates on the progress of completing the sale in due course.
Petra Diamonds Limited is a leading independent diamond mining group with interests in three underground mines in South Africa and one open pit mine in Tanzania. The company's strategy focuses on value production by optimizing recoveries from its high-quality asset base to maximize efficiency and profitability.