Our portfolio incorporates major underground pipe mines and a large high-volume open cast mine
Koffiefontein is one of the world’s top diamond mines by average value per carat
Koffiefontein is one of the world’s top diamond mines by average value per carat
Koffiefontein is one of the world’s top diamond mines by average value per carat
Mining first started at Koffiefontein over 140 years ago and the mine’s remarkable longevity is a testament to its quality.
Koffiefontein is a low grade deposit, but this is countered by the very high value of its diamond production. The mine produces white stones of exceptional quality, a regular proportion of which are of between 5 and 30 carats, and occasional fancy pink diamonds. In 1994, a 232 carat diamond was recovered at Koffiefontein, being the largest rough diamond ever produced by the mine.
FY 2022 production at Koffiefontein totalled 35,302 carats.
| Location | Free State Province, South Africa |
| Size of kimberlite pipe at surface | 11ha |
| Mine start date | 1870 |
| Acquisition by Petra Diamonds | July 2007 |
| Acquisition cost | ZAR 1.9m |
| Ownership | Petra Diamonds: 74%1 Kago Diamonds (Pty) Ltd: 14% Itumeleng Petra Diamonds Employee Trust: 12% |
| Total Resources (inclusive of Reserves) |
5.24 Mcts |
| Current depth of Resources | 720m |
| Mining Method | Sub level and block cave |
| Depth of current mining | 600m |
1. Refer to Petra’s ‘Effective Interest in Mines’ in the following document: Analyst Guidance Explanatory Notes.
Diamonds were first discovered on the Koffiefontein farm in 1870. Mining started in the form of small claims that were later amalgamated into Koffiefontein Mine Limited.
De Beers acquired control of Koffiefontein Mine Limited in 1911. Mining operations were then continuous until the advent of the Great Depression in 1932 when work was suspended. Between 1950 and 1953, a prospecting shaft was sunk which was followed by limited production. The mine was reopened in 1970 and preparations for increased production were completed in August 1971. Immediately after completing the preparations, production from the open pit commenced and proceeded to a depth of 270 metres.
Underground development started in 1974 through a sampling programme. Underground production briefly took place in 1982 but ceased soon thereafter due to the 1981 slump in the diamond market, before resuming again in March 1987. In February 2006, De Beers ceased mining when the old order mining right for Koffiefontein expired and in July of that year Petra commenced operating the mine under care and maintenance conditions, before completing the acquisition of the mine in July 2007.
From its first beginnings, Koffiefontein has been noted for the excellent quality of its diamonds, with Edwin Streeter commenting in 1898 that its diamonds were of the “first water” (meaning of exceptional clarity).
| SUMMARY OF RESERVES AND RESOURCES BY STATUS – KOFFIEFONTEIN |
|||
| Gross | |||
| Category | Tonnes (millions) | Grade (cpht) | Contained Diamonds (Mcts) |
| Diamond Reserves per asset | |||
| Proved | – | – | – |
| Probable | 1.9 | 7.7 | 0.15 |
| Sub-total | 1.9 | 7.7 | 0.15 |
| Diamond Resources per asset | |||
| Measured | – | – | – |
| Indicated | 16.1 | 8.0 | 1.28 |
| Inferred | 121.4 | 3.3 | 3.96 |
| Sub-total | 137.5 | 3.8 | 5.24 |
1. Resource bottom cut-off (Koffiefontein underground and Ebenhaezer): 1.15mm.
2. Reserve bottom cut-off: 1.15mm.
| Unit | FY 2022 | FY 2021 | Variance | |
| Sales | ||||
| Revenue | US$M | 21.5 | 27.9 | -23% |
| Diamonds sold | Carats | 36,950 | 66,650 | -45% |
| Average price per carat | US$ | 581 | 419 | +39% |
| ROM Production | ||||
| Tonnes treated | Tonnes | 466,957 | 754,369 | -38% |
| Diamonds produced | Carats | 35,302 | 59,151 | -40% |
| Grade | Cpht | 7.6 | 7.8 | -3% |
| Segment result1 | (US$m) | (13.8) | (8.1) | -xx% |
| Costs and capex | ||||
| On-mine cash cost per total tonne treated | (ZAR/t) | 1,106 | 651 | +70% |
| Total capex | (US$m) | 0.6 | 1.7 | -65% |
1 Segment result includes depreciation US$0.3 million, Williamson US$5.0 million
Revenue decreased 23% to US$21.5 million as the 39% increase in the average price per carat was more than offset by the 45% decline in the number of diamonds sold.
As Koffiefontein approaches the end of its mine plan in 2025, Petra is exploring options for a responsible exit. We are evaluating non-binding expressions of interest, received post year-end for the mine. If a sales transaction does not eventuate, Petra will evaluate its options and continue to operate the mine responsibly.
The BRE project at Koffiefontein, which is independent of the disposal process, aims to provide for sustainable operations until the mine’s closure and has resulted in a labour reduction process to align the operation with the reduced tonnage profile. This process was concluded and the mine started on a new shift configuration with the reduced labour structure on 30 June 2022.
The BRE project at Koffiefontein, which is independent of the disposal process, aims to provide for sustainable operations until the mine’s closure and has resulted in a labour reduction process to align the operation with the reduced tonnage profile. This process was concluded and the mine started on a new shift configuration with the reduced labour structure on 30 June 2022.
The on-mine cash unit cost increased to ZAR1,106/t, mainly due to decreased tonnages and inflationary increases. FY 2022 capex was US$0.6 million and this was spent mainly on the completion of a workshop underground.
Guidance
FY 2023 to FY 2025 production, cost and capex guidance is maintained and takes into account the lower production and cost profile we have put in place.
Blue Diamond Mines (‘‘BDM’’) holds a valid and unencumbered new order mining right dated 2 February 2007 (the ‘‘Koffiefontein Mining Right’’), granted to it pursuant to section 23 of the MPRDA. The Koffiefontein Mining Right was duly notarially executed by the DMR and registered in the Mineral & Petroleum Titles Registration Office.
A renewal of the Koffiefontein Mining Right was notarially executed by the DMR on 26 April 2017 and, pursuant to such renewal, the Koffiefontein Mining Right confers on BDM the exclusive right to mine for diamonds in relation to the areas it refers to until 23 February 2047.
Section 2 of the Royalty Act requires BDM to pay the South African Government a royalty for minerals recovered under the Koffiefontein Mining Right. Pursuant to section 4 of the Royalty Act, the royalty is to be paid on gross sales in accordance with a defined formula set out in the Royalty Act. The formula applicable to rough diamonds is as follows: 0.5% + (earnings before interest and taxes as defined in Section 5 of the Royalty Act / (gross sales x 9) x 100) but not exceeding 7%.
In addition, South Africa has a rough diamond export levy requirement of 5% as set out in section of the Diamond Export Levy Act 15 of 2007 (“Export Levy Act”). Producers are however exempt from this levy in respect of production that is exported provided that a certain percentage of their production is sold to local diamond beneficiation licence holders, on the basis more fully set out in sections 7, 8 and 9 of the Export Levy Act.
BDM is also subject to corporate tax in South Africa at the rate of 28% in terms of section 5 and other provisions of the Income Tax Act 58 of 1962.
There are no fiscal stabilisation provisions in place in relation to Koffiefontein Diamond Mine.
The high quality white diamonds for which Koffiefontein is known
Koffiefontein occasionally produces pink diamonds
