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Our Mines

Our portfolio incorporates major underground pipe mines and a large high-volume open cast mine

 
  • Koffiefontein

    Koffiefontein is one of the world’s top diamond mines by average value per carat

  • Koffiefontein

    Koffiefontein is one of the world’s top diamond mines by average value per carat

  • Koffiefontein

    Koffiefontein is one of the world’s top diamond mines by average value per carat

Koffiefontein

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.

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Key Facts

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.

Heritage

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).

Reserves & Resources

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.

FY 2022 Results

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.

Mine Plan

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.

  • The total on-mine cash cost for FY 2023 is guided at between ZAR415 and ZAR437 million in real terms.
  • FY 2023 capex guidance is between c.US$1 and US$2 million, primarily relating to sustaining costs.

Mining Right

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.

Highlights

  • July 2007 Acquisition by Petra
  • 59,151 carats FY 2021 Production
  • 5.25m carats Total diamond resource

Map

Koffiefontein Diamonds

The high quality white diamonds for which Koffiefontein is known

GJG_055Koffiefontein occasionally produces pink diamonds