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(Alliance News) - Kazera Global PLC said on Tuesday that despite record carats being produced at its Alexander Bay diamond project, the project was nonetheless "unsustainable".
Shares in Kazera were down 7.0% at 0.93 pence each on Tuesday morning in London.
The Cardiff based investment company, focused on the resources and energy sectors, reported gross diamond sales from December to January of USD236,548 from production at Alexander Bay, South Africa.
From this amount, Alexkor SOC Ltd is entitled to 30% as the owner of the mine and MV5 Pty Ltd is entitled to a further 30% as a result of a joint venture agreement.
Kazera explained that, despite the record numbers of carats being produced, political factors together with MV5 receiving 30% of diamond sales had made the project "unsustainable".
To resolve this, the company has decided to hire a third party who will provide a Pan Plant. This, Kazera said, will give it "total independence" from the Muisvlak plant and a much greater level of control over the processing of its diamonds.
Payment for the use of the Pan Plant will only be made as diamonds are sold. The company added that it has also began legal action against MV5 for payment of money due.
Chief Executive Dennis Edmonds said: "the last couple of months have been frustrating for the company, however, we are very proud of becoming largely independent of the ability of outside forces to influence our diamond production. It is also very encouraging to see the developments in Namibia which will give us a facility capable of meeting all our requirements in the very near future."
In Namibia, Kazera has upgraded its tantalum processing plant to meet export expectations. As a result, the company said it expects successful production to be imminent.
By Heather Rydings; heatherrydings@alliancenews.com
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