Debswana Diamond Company has confirmed that at most 250 employees will be impacted during the shutdown of Damtshaa Mine from 2016 to 2018, which will start in January 2016.
The company said the redeployment and job matching plan will be done in consultation with the Botswana Mine Workers Union (BMWU). Debswana Diamond Company has announced that it will shut down its Damtshaa Mine, which is part of the Orapa, Letlhakane mines, as a result of a slowdown in the global diamond industry.
Debswana confirmed that the mine will go through a maintenance programme for up to three years as part of the company’s response to the downturn in the diamond market. Since the second quarter of 2015, Debswana has been experiencing a significant reduction in the sale of rough diamonds due to weak demand as a result of a global macro- economic slowdown and the strengthening of the US dollar which have put liquidity pressures on cutting and polishing centres. In 2014, Damtshaa extracted 3,800,849 tonnes of ore, treated 1,464,100 tonnes and recovered 303,219 carats.
Damtshaa mine was officially opened on October 25th, 2003 by then Vice President Ian Khama.
During the shutdown, Orapa Mine plant 1 will run at a reduced production level of approximately one million carats per year in order to maintain plant readiness to ramp up production quickly should it be required, Debswana Head of Corporate Affairs, Esther Kanaimba-Senai has revealed.
She further said Debswana has revised its production target for 2016 to 20 million carats to match expected levels of demand for rough diamonds.
“All efforts are being made to preserve jobs by re-deploying affected employees to other parts of the business. At this juncture, we do not anticipate any job losses,” said Kanaimba-Senai.
Debswana believes that it will produce more from Jwaneng Mine which is a high value, low cost asset and reduce production from Orapa, Letlhakane and Damtshaa Mines. On the other side Jwaneng Mine is expected produce an average of 12 million carats per year while production at OLDM will average eight million carats per year.
“This is an unprecedented situation which has impacted the entire diamond pipeline from rough producers, cutting and polishing companies and the retail sector,” said Kanaimba-Senai.
However, she said the budget for care and maintenance will be far lower than at full operation as only 40-50 people made up of artisans, operators and other technical and support services will be deployed there instead of the usual full production staff complement of 260. Since beginning of 2015, the diamond industry has been experiencing problems caused by a drop in the sale and prices of its rough diamonds. Diamonds account for about a third of the country’s gross domestic product (GDP), 80 percent of exports and 40 percent of the entire government’s revenues. Over the years the government of Botswana has used revenue generated from mining of diamonds, through the Debswana Diamond Company, to develop physical and social infrastructure such as roads, water supplies, electricity, telecommunications, health facilities, schools and human capital, for the benefit of all Batswana. The Botswana Mine Workers Union (BMWU) has accused Debswana Botswana Mine Workers Union President Jack Tlhagale told Sunday Standard that the union views Debswana’s decision on the affected employees as a very cheap cost saving method which is also not transparent. Tlhagale said the re-deployed mine workers were not given an option of taking their exit packages, adding that that also could lead to frustration.
“No consultation was done with unions. What Debswana did was improper to issue a media release and broadcast the closure of the mine without the union’s input,” he said.
He further said it is not clear whether the‘re-deployment’ will absorb everybody on their current salaries.