Petra Diamonds reassures shareholders after incident at Cullinan

(Sharecast News) - Petra Diamonds announced on Wednesday that there has been a scaling of the open pit wall at the Cullinan mine in South Africa, following a thunderstorm over the weekend.
The London-listed company said mining in the open pit at Cullinan was discontinued more than 50 years ago, and all current mining operations were underground.

It confirmed that no person was harmed in the incident, and explained that "all necessary precautions" had been taken to safeguard the wellbeing of employees.

The company did not anticipate that the incident would have a material impact on production, but it said it was following all appropriate measures to properly address safety of the related mining areas.

The board explained that, following a thunderstorm on 26 October, a "notable scaling" of the sidewall of the open pit at Cullinan occurred through to 28 October.

It said the scaling was along geological structures, with approximately three million tonnes of material falling into the open pit.

The scaling resulted in a large plume of dust being generated, having "some effect" on the local community, and entering the underground areas.

As a precautionary measure, all employees were evacuated, while an underground team of ventilation specialists and proto team members carried out an underground inspection and declared the mine safe.

The result was that underground mining resumed later in the evening on 28 October, with Petra Diamonds adding that community members were engaged to assess the impact.

Following the incident, there had been "thorough engagement" with the Department of Mineral Resources, the labour unions and the local community, the board claimed, with a number of actions agreed.

The operation was being disrupted for around one day, in order to give management the opportunity to "thoroughly inspect" the underground workings for any anomalies, and to complete a risk assessment before allowing operations to continue.

Petra said the nearest Cullinan community was on the south eastern corner of the pit, with ongoing monitoring of the pit walls showing no unusual movement other than in the south west corner where ongoing scaling was evident.

As a result, it said it did not foresee any risk to the larger community.

The company's dedicated community response team was said to be in direct contact with the community to assist with any concerns, and a public meeting was being scheduled for later in the week to provide further information on the matter.

Chief executive Richard Duffy and chief operating officer Luctor Roode were on site on 29 October with the mine management team, meeting with representatives of the Department of Minerals Resources, union representatives and the community.

"We will take whatever steps are necessary, including the engagement of external technical specialists if required, to better understand this incident and any impact on future pit stability," said Richard Duffy.

"The safety of our employees and surrounding communities continues to remain our key focus.

"Our meetings with our partners in government, labour unions and the community earlier today were very constructive and their valued input is appreciated."

As at 1136 GMT, shares in Petra Diamonds were down 0.99% at 7.62p.