Kimberley Diamonds Ltd (KDL) has formally announced that it has been forced to suspend operations at its Ellendale Diamond Mine and place its subsidiary, Kimberley Diamond Company Pty Ltd (KDC), the holder of the Ellendale mining licence, into voluntary administration.

In a statement released yesterday, KDC said that though there have been “strong processing results at Ellendale in recent months” and the company had “initiated a number of successful cost cutting initiatives”, its revenues have been “negatively impacted by lower recovered grades and lower size distributions and, as a result, lower prices have been realised”.

It added that prices achieved at the auction held last week in Antwerp were significantly lower than those forecasted, resulting from a sharp, unexpected decline in the rough diamond market.

Due to these factors, KDC is unable to continue trading solvently and the KDC board has been left with no option but to place KDC into external administration.

The mine in the Kimberly region of WA was known for producing rare and extremely valuable yellow stones.

Ths statement clarified that the voluntary administration does not apply to KDL or its other subsidiaries which hold the interests in the Lerala Diamond Mine in Botswana or the Lomero-Poyatos project in Spain.