Rockwell to look beyond Orange

ROCKWELL Diamonds, an alluvial diamond miner on the Orange River in the Northern Cape, is not bound to ancient river beds and will look at other opportunities, its CEO says.

ROCKWELL Diamonds, an alluvial diamond miner on the Orange River in the Northern Cape, is not bound to ancient river beds and will look at other opportunities.

A number of older, mothballed diamond deposits could be revisited if rough diamond prices increased, CEO James Campbell said.

De Beers, the world’s largest rough diamond producer by value, has said a gap between supply and demand will start opening from 2020, with, at its heart, a dearth of new discoveries of large deposits.

Asked if this was a space Rockwell could occupy, Mr Campbell said: “What Rockwell has is a very strong operational team, which we want to lever in the mining of kimberlites as well as alluvials.”

Conceding that Rockwell had a small market capitalisation of R177m, he said the company moved 750,000 tonnes of ore a month and employed 1,000 people directly and indirectly as contractors.

“We see southern Africa, particularly the area we’re working in, as an opportunity for marginal deposits, because that’s what our cost model is. We are ruthless on operating costs. The bigger players just can’t do that. We can.”

Just two or three companies, including Rockwell, operate mines in the Middle Orange River area between Douglas and Prieska.

A rise in diamond prices, as some expect, would open marginal areas in the Rockwell tenements.

“We run at a margin of between $1 and $2 per cubic metre. If diamond prices go up, we can mine even lower grade areas, of which there are vast amounts,” Mr Campbell said.

Rockwell is mining the Niewejaarskraal and Saxendrift properties and is planning a mine at Wouterspan, for which it would have to raise capital in debt and equity of $42m. It has several prospecting rights.

With a number of bankruptcies or failed operations in the area, Rockwell could look at growing its land package, Mr Campbell said, but it would explore the opportunity very closely because of potentially unpaid environmental rehabilitation liabilities or other pitfalls.

“What you’d like to do is buy the mineral right and not take over the company itself, where there are all kinds of debtors and other litigation. Our preference is to buy the assets because that’s cleaner.”