Petra Diamonds' Shares Sparkle As It Solves Labor Disputes in South Africa

Cecilia Jamasmie
Mining.com

Petra Diamonds' shares sparkle as its solves labour disputes in South Africa
Finsch mine. (Image courtesy of Petra Diamonds.)

Shares in Petra Diamonds (LON:PDL) climbed more than 12% on Thursday after he company said it had reached a wage agreement with the main union at two of its mines in South Africa, adding that miners will return to work on Friday.

Workers belonging to South Africa’s National Union of Mineworkers (NUM) downed tools at Petra’s Finsch mine and the Kimberley Ekapa joint venture last week. Underground and surface mining have been affected at both sites but its treatment plant is running “near normal” capacity, it added.

The three-year wage agreement with the NUM sets annual increases to members in the region of 9% to 10% for year one and 8.5% for the second and third year. Lower level employees will get a 7.5% pay hike a year.

NUM’s demands included a 10% salary increase across the board and a housing subsidy of 1,500 rands to be paid every month for three years.

The union also wanted increases in medical aid, family leave, annual leave, equal pay and an increase in the employer’s contribution to the pension fund to 9%, from 7.5%.

The three-year wage agreement with the NUM, said Petra, sets annual increases to members in the region of 9% to 10% for year one and 8.5% for the second and third year. However, given lower wage increases for other levels of employees, the overall paid increase will be 7.5% a year.

The company also said there was no impact on its annual guidance for costs and production of 4.8 to 5 million carats for 2018.

The stock climbed as much as 12.28% to 80p in late afternoon trading, closing at 78.75p and so extending this week’s gains triggered by the Tanzanian government’s authorization to resume diamond exports and sales from its Williamson mine. On Tuesday, shares had hit their lowest since late 2015.