--ADDS BROKER COMMENT AND SHARE PRICE-
DiamondCorp (LON:DCP) has secured a long term wage agreement with workers at its Lace mine in South Africa.
City analysts welcomed the development as did the market and shares rose 5.17% to 7.625p.
The four-year deal brokered with the Association of Mineworkers and Construction Union is based around an annual 8% increase in salaries for most Lace employees.
DiamondCorp has also committed to progressively raising the monthly salary of the lowest paid miners to 12,500 rand (just under £700) a month over the term of the new agreement.
Chief executive Paul Loudon said: "This long wage agreement will provide industrial relations stability at the Lace mine during the critical mine start up years and demonstrates a solid maturing of relationships between the union and management.
“We are particularly pleased to have negotiated a four year agreement rather than the more common two or three year agreement.”
Broker Sanlam noted: "A four year wage agreement is very unusual in South Africa and probably unprecedented in the diamond mining industry.
"It provides long term stability for the Lace Mine and its shareholders in a country where labour issues (namely striking) are one of the greatest risks for mining companies." It repeated a 'buy' stance.
Broker Northland rates the shares a 'hold', adding: "The Lace project is a relatively small employer compared to other mining projects in South Africa with less than 260 workers at present; the project is also economically robust and as a result, will be able to carry the additional Labour costs, while still generating significant returns for the company’s shareholders.
Panmure Gordon rates the shares a 'buy' targeting 19p.
It said: "We welcome the reduced labour-relations risk that the four year agreement should bring."