In spite of earlier pronouncements by highly placed government officials that Botswana’s economy will be exempt from the unfolding global financial crisis, Debswana Mining Company only reneged at the eleventh hour on its decision to shut down production for up to 12 months at its relatively new Damtshaa as well as the oldest DK1 mine in Letlhakane, respectively. The closure was initially scheduled for December 16.
Impeccable sources at the mines have informed the Sunday Standard that Plant no.2 in Orapa, which started operating in 2000 was also initially set to close in the next six months whilst the Jwaneng mine would remain untouched for an unspecified period of time. The action would have resulted in the loss of more than 1500 jobs.
Following pressure from mine workers’ protest demonstrations and a series of extensive consultations between the management of Debswana and the Botswana Mine workers Union (BMWU), it emerges that agreement was arrived at that the shut down will now be confined to a much shorter time than initially feared.
However, this is only a temporary arrangement to provide space for consulting effectively with all relevant stakeholders.
The agreed upon shutdown dates for non-contop employees are scheduled for the 29th of December to the 23rd of January, while contop employees are scheduled for the 27th of December to the 21st of January.
Contrary to the early initiated terms of an unpaid leave, both parties have agreed that all employees will be on company paid time off during the Christmas shutdown.
The decision to back down may have resulted from the massive industrial action that mine workers, through their union (BMWU), had embarked on last week on the very day that the year long closure was intended, in a bid to protest the company’s move.
Workers were adamant that the closure was unnecessary.
The industrial action followed revelations that came after one meeting between management and BMWU, after which workers were notified that a number of employees at the affected mines were to be served notices of forced unpaid leave for a period of 12 months due to the initiated year long shut down. The revelations had hit the corporate world by storm as economists worried about the implications this unwelcome development would bring to the economy of Botswana.
Information passed to the Sunday Standard indicates that the melt down will equally weigh heavily on the lives of families of employees. Latest revelations that heads of commercial banks, mainly Standard Chartered Bank of Botswana and Barclays Bank Botswana, have issued directives to all their branches to the effect that all Debswana employees should not be granted loans do confirm this. This followed after news of the alleged closure reached their circles.
Dr Keith Jefferis, an Economist and former Deputy Governor of the Bank of Botswana told the Sunday Standard that although the long term prospects for the mining industry are quite good it might not be realistic to look at 12 months as sufficient period for suspending operations.
“There is currently a lot of uncertainty in the levels of diamonds consumer markets,” said Jefferis. He said there might be more certainty mid next year as to how quickly or longer the diamond industry could recover.
Meanwhile Suashish diamonds (PTY) ltd, a diamond trading company (DTC) in Botswana has also recently retrenched some of its workers.