State diamond firm running out of cash
STATE-owned diamond company Alexkor, which operates on the west coast, only has enough operational money to last for the next eight months, board chair Hantsi Matseke said in parliament yesterday.
At the end of March, the company’s cash reserves stood at R332million, down from R384-million at the end of the 2014-15 financial year.
Matseke told the public enterprises portfolio committee that one of the reasons for the cash shortage was the non-replenishment of its resources from the pooling and sharing joint venture with the Richtersveld community.
Another reason was the poor level of carat production.
The company suffered a R35-million loss at the bottom line in the last financial year, which was nevertheless an improvement on the previous year’s R82-million loss.
Diamond revenue slid 7% from R414-million to R387-million.
Matseke said to assist with Alexkor’s cash shortage, the board had approved the use of the R45-million excess in the allocation in the medium-term expenditure framework, which was earmarked for rehabilitation.
Other funding options were being explored, she said, and measures had also been adopted to contain costs.
About a year ago, Alexkor was exploring the beneficiation of coal as an extra leg of its business but Matseke told MPs that this had been put on the back burner.
Public Enterprises Minister Lynne Brown has asked that Alexkor “exhaust all avenues relating to further investment in diamond projects”.
One area to explore was the cutting and polishing of diamonds, which Matseke said was severely lacking in South Africa.
Meanwhile, alluvial diamond miner Trans Hex, which is facing a takeover bid, swung to an interim profit as its Angolan mines offset losses at its South African operations.
Net profit was R32.5-million for the six months to end-September, compared with a R32.5-million loss in the same period a year earlier, Trans Hex said.
It noted that the offer for the company closed on November 25.
In August, Cream Magenta and Metcap – two companies owned by billionaire Christo Wiese – bought 47.08% of Trans Hex and, together with investment company RECM and Calibre Investments, launched a mandatory offer for the whole of Tran Hex. Calibre owns 25.2% of Trans Hex.
The independent board of Trans Hex advised shareholders not to accept the offer, pointing out experts had set a fair and reasonable value of R8 a share for the company, more than double the bid on the table.
Trans Hex’s continuing operations – which include its wholly owned mines in South Africa, its 33% stake in Somiluana mine in Angola and 40% of West Coast Resources, which bought the Namaqualand mine from De Beers – made a R10-million profit for the period compared with a R43-million loss before. – BDlive