WCR has contracted Trans Hex to manage the company’s operations and to market the diamonds it produces
ABOUT 300 workers from West Coast Resources (WCR) diamond mine in Koingnaas, in the Northern Cape, are set to lose their jobs after the company last week lodged an application to the Western Cape High Court to be placed under provisional liquidation.
WCR is a diamond mining company with operations in the Namaqualand region of the Northern Cape.
The company is owned by Trans Hex Group Ltd (67.2%), the state (Department of Public Enterprises) (20%), Dinoka Investment Holdings (Pty) Ltd (8.8%) and the Namaqualand Diamond Fund Trust (4%).
WCR has contracted Trans Hex to manage the company’s operations and to market the diamonds it produces.
Mining activities commenced in December 2015.
Production for the company’s third financial year, which ran from April 1, 2017 to March 31, 2018, totalled 173 920 carats at an average grade of 27.84 carats/100 tons, an average stone size of 0.23 carats per stone and an average price of US$153 per carat.
As at the end of June 2018, the company had created more than 260 permanent jobs and 69 part-time employees were employed as a result of the company’s operations.
However, last week, Trans Hex said that as a result of WCR’s trading activities having deteriorated over the past few months due to, inter alia, diamond prices declining by 27% and the average diamond grade declining due to lower than expected grades achieved, WCR was “not in a position to meet its working capital requirements without the necessary funding being made available to WCR”.
“Accordingly, shareholders are advised that the major shareholder of WCR, including Trans Hex Operations Proprietary Limited (THO), have lodged an application to the Western Cape High Court for WCR to be placed into provisional liquidation.
“Shareholders will be updated of any further developments pertaining to the liquidation application in due course,” a statement read.
The DA in the Northern Cape said yesterday that it had “noted with concern” that approximately 300 people were set to lose their jobs at the diamond mine in Koingnaas.
“The DA has learnt that the executive chairperson of West Coast Resources, Marco Wentzel, informed staff that a process of preliminary liquidation would be effective from October 18, 2019, after an agreement with Kernel Resources to take over the management of WCR fell through. The application for liquidation will be heard later this month, on October 29, 2019,” DA spokesperson Veronica van Dyk said yesterday.
“All WCR operations, which saw 260 permanent employment opportunities plus an additional 69 temporary workers employed at the end of June 2018, have ceased with immediate effect and Transhex has undertaken to pay workers up until October 18, 2019.
“The closure of WCR is bad news for the people of Koingnaas. Hundreds of families now face a bleak Christmas, not knowing where their next pay cheque will be coming from,” Van Dyk said.
She added that the shedding of jobs in the mining sector had become an all too common phenomenon, as government failed to promote mining investments.
“It is high time that government helps to build the mining sector instead of breaking it own. The DA will write to the Minister of Public Enterprises, Pravin Gordhan, asking government to intervene and see if there is anything that can be done to save the affected mining enterprise.
“However, until the government scraps the mining charter and opens up our mining sector to more competition, innovation, and investment, we should probably brace ourselves for more devastating job losses in mines across the Province and the country,” Van Dyk concluded.