Debswana mine, which was put on care and maintenance because of weak demand for diamonds last year, will be opened immediately after the diamond markets recovers.
The mine was put on care and maintenance beginning January 2016 because of deterioration in the diamond markets as result of unprecedented slow movement of diamond inventory throughout the entire pipeline. Minister of Minerals, Energy and Water Resources Kitso Mokaila told parliament Monday that the opening of the mine will be determined by improvements in the diamond markets.
“Indications show there is light at the end of the tunnel. The mine will be opened immediately the diamond markets improve. The closure of the mine was intended to align production to demand and preserve cash by reducing operational and capital expenditure,” said Mokaila.
12 contractors engaged by Debswana operate at Damtshaa mine, four of which are joint ventures between locals and foreigners while the other eight are wholly citizen owned. To date the mine and its sub contractors have not experienced any job losses. Mokaila revealed that all employees of Damtshaa were retained and redeployed to other parts of the business.
“Furthermore employees of Damtshaa contractors have been re-allocated to other areas at Orapa mine and Letlhakane mine. All contractors who were on short term contracts are going to continue with the work until their contracts elapse,” said Mokaila.
“To protect shareholders, the company took a decision to optimize revenue and distributions by maximizing production at core assets and scaling down production at lower value and lower margin assets.”
Debswana maximized production at Jwaneng mine and Orapa No.2 plant, while Damtshaa mine was put on care and maintenance and operations at Orapa No.1 plant were scaled down. However, Mokaila said he does not envisage or expect the closure of the mine to have any impact on economic activity in Letlhakane. He further explained that the closure as an immediate response to the serious challenges that the diamond market was facing, meant to preserve jobs and protect the Debswana business going forward. Damtshaaa mine is Debswana’s youngest diamond mine, opened in 2003.