South Africa’s state-owned diamond mining enterprise Alexkor is desperately in need of cash to pay expenses, but does the struggling entity deserve more funding?
Its marine-based concessions stretch from Alexander Bay to Port Nolloth, while its land-based concessions span the equivalent of 865km2. It mines the latter through its Pooling and Sharing Joint Venture (PSJV) with the Richtersveld community.
Despite carat sales having increased from 41 941 units to 70 061 in the year to end-March 2019, diamond sales only amounted to R209.9 million (2018: R208.7 million). Cost of sales was R152.9 million (2018: R126.8 million).
The reasons given for this poor performance: an oversupply of diamonds in the market, as well as the quality and size of the diamonds produced.
Land and shallow water diamonds achieved an average of $456.77 per carat (2018: $718.86), while diamonds from its deep water mining concession achieved an average price of $305.64 (2018: $187.56).
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