JOHANNESBURG (miningweekly.com) – State-owned diamond mining company Alexkor must comply with financial audits and find new sources of cash, new Public Enterprises Minister Lynne Brown urged on Thursday.

In an Alexkor annual general meeting address, which was distributed to the media following the calling off of a media conference to which Mining Weekly Online had been invited prior to its cancellation, Brown expressed concern about the cash constraints that might be confronting Alexkor, which she urged to look for income sources.

“I am concerned about the cash constraints that Alexkor may experience in the near future.

“The company should explore other sources of income to mitigate against this risk,” Brown urged.

Also worrying her was the expression of an unqualified audit opinion by the auditors on Alexkor’s noncompliance with legislation.

“I am concerned that the emphasis of matter refers to the noncompliance with legislation, internal control inadequacies and the financial management’s lack of preparedness for the audit,” the Minister said before exhorting Alexkor to put urgent measures in place to ensure compliance in the 2014/15 financial year.

The Minister referred to a R60-million investment in a diamond plant creating more than 200 jobs and lifting diamond production from 36 000 ct in 2012/13 to 46 000 ct in 2013/14, but expressed concern about the exchange rate chosen in reporting a 33% revenue increase.

She expected continued efforts to improve performance and needed to be informed how Alexkor was ensuring the inclusion of local contractors, the Richtersveld community and the Northern Cape’s marginalised communities.

The Minister made no mention of Alexkor’s decision, announced at a media conference a year ago, to enter into several joint ventures with emerging black-, women- and youth-owned mining start-ups to develop operations that would mine and deliver high-grade limestone and coal to State-owned power utility Eskom.