THE BOTTOM LINE
No surprise as Petra bails out of its Ekapa joint venture
Fear that more unmined surface resources will be taken over by hostile groups and given mining rights
Possibly one of the least surprising developments in the diamond mining sector was the sale by Petra of its stake in the Ekapa joint venture to process tailings dumps in Kimberley.
The joint venture in which Petra, a London-listed, South Africa-focused diamond miner, holds a 75.9% stake with its empowerment partner was sold in early July 2018 to the minority partner to continue mining the underground workings and tailings.While the R300-million paid over a two-year period from the start of 2019 will be a welcome injection of cash, that is not the key factor driving the decision. The Ekapa joint venture provided 800,434 carats in 2017, but given Petra’s management is absorbed with delivering its giant Finsch and Cullinan projects, the social problems associated with Ekapa are absolutely the last thing it needs to divert its attention.
A recent trip by Business Day to Kimberley included a fleeting visit to one of the resources handed over to a community that had invaded an old tailings footprint. We were met with hostility and threats by a group of balaclava-wearing men.
That unmined surface resources can be taken over by a hostile group and given mining rights by the Department of Mineral Resources gives rise to fears that there will be similar invasions of land held by mining companies for future mining and be tacitly endorsed by the department.
It’s little wonder that a company with the London listing of Petra would extricate itself quickly from an operation where unchecked artisanal mining was allowed to flourish. It will now focus on underground mines where such problems will not arise again.