Toronto: DiamondCorp announced sweeping retrenchments on Monday, saying talks with its lender and a mining union had failed to end in an agreement.
The miner’s business-rescue practitioner had been in discussions with the Industrial Development Corporation of South Africa (IDC) - its lender - and the Association of Mining & Construction (AMCU). The talks followed DiamondCorp subsidiary Lace Diamond Mine (LDM) entering business rescue in November, after torrential rain caused a suspension of operations.
However, negotiations between the business-rescue practitioner at Deloitte & Touche and the AMCU “have terminated without a settlement being reached” on whether to allow care and maintenance of the Lace mine in South Africa to commence, DiamondCorp said Monday. “Consequently, effective April 3, all employees will be retrenched,” the miner said.
Meanwhile, LDM has appointed Lebogang Mpakati of Independent Advisory as a joint business-rescue practitioner alongside Deloitte’s Daniel Terblanche.
DiamondCorp’s board has warned that the group will need to be placed in administration if an “accelerated” funding plan cannot be completed by mid-May 2017. Avoiding this situation would also require a significant debt restructuring, as well as a successful exit from the business-rescue process, the miner pointed out.
