Labour dispute in South Africa dents Petra Diamonds share price

 
Courtney Goldsmith
Follow Courtney
The Finsch mine in South Africa is one of the world's major diamond mines
The Finsch mine in South Africa is one of the world's major diamond mines (Source: Petra Diamonds)

Petra Diamonds' woes have continued today as the miner revealed it was hit by labour disruption overnight in South Africa, sending shares down five per cent.

The company was assessing the impact of labour disruption at its Finsch mine and its Kimberley Ekapa Mining joint venture operations.

Members of South Africa’s National Union of Mineworkers were on strike over pay, according to regional secretary Cornelius Manhe.

Shares in the London-listed company were down 5.05 per cent to 75.25p in afternoon trading.

In its full-year results yesterday, Petra had warned that there could be labour unrest as it finalised a new wage agreement for its operations in South Africa.

Today it said underground and surface mining were affected by the strike, but plant treatment was continuing at near normal capacity. Normal operations were continuing at its Cullinan and Koffiefontein mines.

Petra said:

The company is in ongoing discussions with the National Union of Mineworkers in order to resolve the situation and is closely managing the situation to ensure the least possible impact on group production. Petra will update the market as the situation unfolds.

The diamond miner's shares dropped yesterday after the company warned it could breach its debt covenants if it failed to resolve a dispute with the government on Tanzania.

Operations resumed at its Williamson mine after the company had been forced into a four-day stoppage earlier this month amid a government probe of the country's diamond sector, but it is still in talks with the government over a parcel of 71,654 carats of diamonds that was seized.

The company's share price has fallen around 30 per cent so far this year.

Read more: Petra Diamonds shares lose their sparkle on Tanzania troubles

Related articles