Rockwell settles industrial action and wage negotiations at its Northern Cape operations

Rockwell Diamonds Inc reports on the resolution of industrial action at its Wouterspan Mine and finalization of wage negotiations with the National Union of Mineworkers. NUM represents the majority of the Company’s employees. Operations will resume at all of the Company’s mines on Wednesday September 3, 2008.

Following negotiations between the Company and the NUM, the parties have settled the disciplinary procedure and hearing initiated against employees at its Wouterspan Mine on the Middle Orange River in the Northern Cape Province of South Africa. As reported in a news release of July 25, 2008 this action was initiated following illegal strike action at this mine.

During discussions and negotiations with the NUM in respect of the Wouterspan industrial action, the Company was also able to conclude wage negotiations which were implemented in June 2008. These negotiations reached a deadlock in mid August and were followed by work stoppages at the Company’s other operations.

The Company has agreed on a 13.5% increase on the basic wage paid to its employees, excluding management levels. This increase is in line with latest consumer price inflation figures for South Africa.

During the industrial action and work stoppages experienced by the Company, Rockwell was able to maintain day time shift production through the efforts of its mine management and supervisor teams supported by non-unionized employees, at its Saxendrift, Wouterspan and Klipdam operations. Health and Safety procedures were adhered to at all times, routine maintenance and repairs, as well as upgrades of certain plant and equipment was performed during the period of industrial action.

As a consequence of the Wouterspan industrial action and stoppages experienced due to wage issues, the Company has experienced production losses during late July and the month of August, with production falling by approximately 55% for the month of August.

No delays were experienced with the fabrication and construction of the Company’s new high-volume Wet-Rotary Pan Plant being constructed on the Saxendrift property. Start-up of this plant is scheduled for early November 2008.

President and CEO John Bristow noted “We are pleased to have successfully resolved the Wouterspan industrial action and wage negotiations in constructive dialog with our employees and the National Union of Mineworkers. Our negotiations and discussions with the NUM have allowed the Company and its employees to table and discuss challenges faced by both parties and to put forward improved communication and information sharing procedures. We will be implementing some of the ideas put forward including more regular meeting forums and other dispute resolution mechanisms for the Company and its employees.”