08 Jun 2017

Directors of Lerala Diamond Mine (LDM) have engaged Mr Mark McKee of Armstrong Attorneys to decide its fate.

This is after the mine’s parent company, Kimberly Diamond Limited (KDL) notified LDM that it was withdrawing its support and would no longer be providing any more fundings to support the mine’s operations.

The directors of LDM however decided to place the mine under judicial management or alternatively wind up the company.
Lerala Mine was shut down last week Monday, leaving close to 200 employees in the lurch. This is not the first time the mine closed down.

Briefing employees on behalf of LDM director, Mr Laila Green and country director, Mr Spencer Kaisara on Monday said Kimberly Diamond was unable to generate sufficient funds to support its ongoing operations at Lerala.

He said in light of the financial support from the Australian KDL, a review of the present financial position of LDM was undertaken by its directors, including an analysis of potential courses of action to deal with the present financial position.

Mr Kaisara said it was disappointing for all involved not to be able to come up with a solution.

He further said that critical funding was expected from Chinese financiers three weeks ago, but that did not materialise, leaving the directors with no choice, but to cease operations.

Mr Kaisara told the employees that given the uncertainty, LDM could not continue to incur costs without the confidence of timely financial solution.

He informed employees that LDM had rough diamonds which the mine was hoping to sell to the potential buyer to pay May salaries.

He said the salaries of the employees were solely dependent on the diamond sale.

Mr Kaisara promised to communicate with the attorney on the date employees were to stop their payable leaves so that the mine did not incur more costs.

He said there was hope that by June 15, a decision on the fate of the mine would be reached. ENDS