Rockwell Operational Update: Restructuring Underway



    VANCOUVER, Jan. 12 /CNW/ - Rockwell Diamonds Inc. ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) announces an update on its
operational plans for early 2009.
    Further to the previous announcement that the Company would be extending
the normal year-end shutdown to January 5, 2009, the Company has elected to
extend this shutdown period to the end of January 2009 as a consequence of
continued weakness in the diamond market. This decision follows a detailed
review by Management and the Directors of the Company of the prevailing static
conditions in the diamond market, cash flow projections, operational
parameters and costs, and technical factors such as grade characteristics of
each mining operation. Further to this review the Company is also planning to
restructure its Middle Orange River operations to reduce costs and increase
production and efficiencies.
    The Wouterspan and Saxendrift operations are located near to each other
on the Middle Orange River. A new low cost, high volume plant was successfully
commissioned at Saxendrift in the latter part of 2008. Current plans are to
rationalize production at the two operations, focusing on ramping up
production at the new Saxendrift plant in February and suspending operations
at the lower grade Wouterspan operation until such time as a new high volume,
low cost, twin modular 18-foot pan plant is constructed and commissioned at
Wouterspan.
    The proposed suspension of operations at Wouterspan is, unfortunately,
likely to result in the reduction of staff at Wouterspan and to this end
negotiations have been initiated with the Company's employees and the National
Union of Mine Workers, which is the labour organization representing the
majority of the Company's employees. The longer term plan is to upgrade the
Wouterspan plant as described above and to then reinitiate mining and
processing.
    Maintenance and modifications for further cost savings (for example,
replacement of the de-sanding unit at Holpan with a simple, effective low cost
degrit and cyclone system) are on-going at all of the Company's other
operations, which are scheduled to restart at the end of January.
    President and CEO John Bristow stated "Global economic conditions have
brought diamond prices under pressure. In this environment, we continue to
take steps to improve operational efficiencies and maintain the
competitiveness of the Company. This has included the difficult decision to
reduce our workforce. Over the past twelve months the Company has successfully
demonstrated flexibility and ability to rapidly adapt to challenges which have
included power outages, spiraling fuel and steel costs, industrial action, and
an unsolicited offer for the Company. In spite of these challenges, the
Company has achieved profitability thereby setting itself apart from a number
of its peers. We are addressing these new market driven challenges and
acknowledge the performance of our employees in these tough times and, in
particular, those likely to be affected by the restructuring."
    Financial results for the period ended November 30, 2008 are expected to
be published on or about January 14, 2009. The Company will host a telephone
conference call on Thursday, January 15 at 10:00 a.m. Eastern Time (7:00 a.m.
Pacific; 5:00 p.m. Johannesburg) to discuss these results. The conference call
may be accessed by dialing (877) 857-6173, or (719) 325-4788 internationally.
A live and archived audio webcast will also be available on the Company's
website at www.rockwelldiamonds.com. The conference call will be archived for
later playback until midnight, Thursday January 22, 2009 and can be accessed
by dialing (888) 203-1112 in Canada and the United States, or (719) 457-0820
and using the passcode 7449151.

    
    John Bristow
    President and CEO

     No regulatory authority has approved or disapproved the information
                       contained in this news release.


                         Forward Looking Statements
    

    This release includes certain statements that may be deemed
"forward-looking statements". Other than statements of historical fact all
statements in this release that address future production, reserve or resource
potential, exploration drilling, exploitation activities and events or
developments that each Company expects are forward-looking statements.
Although the Company believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions, such
statements are not guarantees of future performance and actual results or
developments may differ materially from those in the forward-looking
statements. Factors that could cause actual results to differ materially from
those in forward-looking statements include market prices, exploitation and
exploration successes, changes in and the effect of government policies
regarding mining and natural resource exploration and exploitation,
availability of capital and financing, geopolitical uncertainty and political
and economic instability, and general economic, and market or business
conditions. Investors are cautioned that any such statements are not
guarantees of future performance and that actual results or developments may
differ materially from those projected in the forward-looking statements. For
more information on Rockwell, Investors should review Rockwell's annual Form
40-F filing with the United States Securities and Exchange Commission
www.sec.com and the Company's home jurisdiction filings that are available at
www.sedar.com.





For further information:

For further information: on Rockwell Diamonds Inc., please visit the
Company's website at www.rockwelldiamonds.com or contact Investor Services at
(604) 684-6365 or within North America at 1-800-667-2114


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