The Equitable Access Campaign (EAC), which includes local marine diamond miners operating off the coast of Alexander Bay, tells Mining Weekly it strongly disagrees with State-owned land and marine diamond mining company Alexkor’s concessions potentially being sold off.
It argues that Alexkor’s assets are “unquestionably strategic” and “arguably priceless”.
Stories published by Mining Weekly on May 27 and June 17 alluded to Alexkor being technically insolvent, with suggestions that its deep-water concessions should be sold. Mining Weekly in May quoted Alexkor administrator Lloyd McPatie as stating that Alexkor was trading recklessly and could not meet its financial obligations. Because Alexkor is State-owned, it is required to report to Parliament, and McPatie had briefed the Portfolio Committee on Public Enterprises and Communication.
McPatie said the mine would run out of cash by June, following a loss of R63.5-million in 2019, and suggested that a new corporatised and adequately recapitalised entity be established to own and manage the mine.
Following this, Sable Metals & Minerals CEO James Allan wrote to Mining Weekly with the view that a panel of experts should be formed to “properly oversee” the future of Alexkor, and to unlock the greater long-term potential of Northern Namaqualand.
The EAC rejects large parts of Allan’s response, with the organisation disputing his claim that diamond deposits on the shore and at sea have been mined for 90 years and have been depleted to a large degree.
The EAC says it disagrees with Allan’s overall diagnosis of Alexkor’s problems.
It agrees that the terrestrial diamond terraces have been mined for more than 90 years and that these terraces are now mined out for the most part, but says the marine terraces are an “entirely different matter”. It says these still have the potential to be mined for another 100 years.
Substantiating its claim that the marine resource is still viable for mining, the EAC points out that the submerged marine diamond terraces hold the bulk, probably about 95%, of the overall diamond population that was transported to the Atlantic Ocean by the Orange river drainage system from the volcanic pipes that hoisted them to the earth’s surface many thousands of years ago.
Further to this, the extensive onshore mining operations along the coast only constitute what the EAC describes as “nibbling along the edges of the greater overall diamond mega‐placer deposit”.
The onshore terraces occupy a coastal strip of deposits about 2 km wide, while the seabed marine terrace is about 45 km wide, according to the EAC.
This large marine diamond deposit has not been developed, says the EAC, firstly because, until recently, the geotechnical challenges were insurmountable.
Secondly, it says, the marine deposit has also been at the centre of State capture dynamics that have created an environment “too toxic” to attract the capital investment, innovation and entrepreneurship that such an undertaking requires.
The EAC also counters Allan’s claim that the current split established with the pooling and sharing joint venture between Alexkor and the Richtersveld Mining Company (Alexkor RMC JV) favours mining contractors over small-scale miners because the small-scale miners have no other option and their assets are “hopelessly stranded”.
The EAC says this situation has been "unethically exploited" by Alexkor RMC JV.
The EAC states that Allan’s claim of an “experienced independent diamond valuator” being appointed to “ensure the contractors’ interests were taken care of" is disingenuous as it believes there is no such thing in South Africa’s “deeply conflicted rough diamond trading industry”.
The EAC contends that the entire South African diamond value chain needs to be subjected to deep scrutiny and fundamental overhaul in the public interest.Creamer Media Senior Deputy Editor Online