Petra Diamonds has denied claims from a South African labor union that it intended to dismiss as many as 468 employees due to challenges continued weakness in the diamond market has triggered.
The redundancies will impact a total of 84 employees from the company’s Cullinan and Finsch mines in South Africa, a Petra spokesperson told Rapaport News Monday. That figure is much lower than the one the National Union of Mineworkers (NUM) reported last week. The group alleged the company was looking to replace many of its permanent employees at the two deposits with contract labor, which would be cheaper to maintain. Some workers have already accepted voluntary separation packages, while the miner has placed others in alternative roles, the spokesperson noted.
Those the company let go received severance packages, extended employee assistance programs, financial advisory services and skills development initiatives, the miner explained.
“Petra confirms that, due to the ongoing and prolonged downturn in the global diamond market, the company has had to initiate a [dismissal] process,” the spokesperson continued. “This is an unfortunate and difficult decision, but one that has become necessary to ensure the long-term sustainability of its operations. We recognize the challenges posed by this process and have taken all possible measures to minimize the impact on our employees while safeguarding the future stability of the company.”
This is the third time Petra has initiated layoffs in the past year, it said. It previously cut staff at Finsch due to a decline in production from 2.8 million tonnes of ore per year to 2.2 million. Market constraints drove other dismissals, Petra said. The most recent redundancies affected employees from the company’s group office and support services teams.
“Over the past months, Petra has implemented extensive cost-saving initiatives, including capital reductions, operational efficiency improvements, and nonlabor cost reductions,” the spokesperson added. “Every possible alternative was explored before arriving at this last resort.”
Petra will offer all impacted employees priority consideration for recall should the market change within the next 12 months and suitable positions open, it said.
Image: A worker performing an inspection at the Finsch mine. (Petra Diamonds)
