Friday, October 30, 2020

Debswana dismisses inefficiency allegations

Contrary to recent reports that Debswana mines are not efficiently managed, information released this week shows that they are the best performing in all the mines that De Beers has a stake.

Debswana mines in Botswana are a 50/50 percent operation between Botswana government and the South African De Beers.

De Beers has complained to government that Debswana mines are less efficient.
But armed with figures and statistics, Seb Sebetlela, the General Manager of Orapa, Letlhakane and Damtshaa Group of Mines, recently made a comparative analysis presentation to a group of Botswana journalists showing them that within the De Beers stable related mines, Debswana operations are the most efficient, coming closest to reaching the global operating efficiencies benchmark.

This, Sebetlela said, is particularly important given that Debswana operations are significantly large in size even by international standards.
Orapa, Letlhakane and Damtshaa Mines operate at $10 per ton of treated ore. This is the global benchmark of operational efficiency in diamond mining.

The Debswana lower operating costs are despite the fact that because of its seclusion, the Mines have to invest significantly in social services such as health, education and recreation as a way of attracting and retaining top notch cadre of technical experts needed to run such operations whose services are the world over in short supply and intensely competed for.

In the De Beers stable, the mine that comes anywhere closer to Debswana ones is the Venitia in South Africa.
Though smaller, Venitia operates at $17 for every ton of ore treated.
The kimberely Mines, which are much smaller, go at $11 per ton.

Recently, De Beers approached government with a request to be given a management contract to run Debswana Mines.
Except for the General Manager at Jwaneng Mine, most of the Debswana top management is made up of citizens.

Investigations by Sunday Standard have revealed that De Beers is not happy with the way things stand at Debswana Mines alleging inefficiencies.
Permanent Secretary in the Ministry of Minerals, Dr. Tombale, has confirmed that De Beers have since expressed unease at the way Debswana Mines are operated.

Government turned down the request, pointing out that Debswana was not just a cash cow but also an immensely important social responsibility vehicle through which the country hopes to nurturer world class manpower skills for export and home purpose uses.

“De Beers feel they can do better. With the mines going underground and becoming more capital intensive De Beers feel they have the right people for the job,” said Tombale.

He, however, went on to say that the suggestions by De Beers were never actually deliberated upon at any significantly level given that government felt that the suggestion was a non starter.
On a related matter, Sebetlela said Debswana is grappling with huge challenges brought about by increased competition for skilled technical manpower.

He said with the Southern African Sub region opening up and countries like Angola and the Democratic Republic of the Congo joining the mining fray and offering more incentives, there is now intensive competition for mining engineers and related expertise.

“But I want to point out that Debswana staff turnover is not necessarily high by industry standards. Of course, the people that do leave are those that are in short supply and high demand for their skills is pushing up their worth. But this is not a uniquely Debswana problem.”

He said the rest of the world is looking up to Southern Africa as a reservoir for such required skills.
“It has nothing to do with morale or related issues. New companies are coming up and the pressure is increasing.”

On whether or not the costs of additional social services that Debswana has to invest to make itself attractive are not undermining the company competitiveness and internal efficiencies as to prompt complaints by one shareholder, Sebetlela said they do not view such investments as a burden.

“We do not look at such investments as a burden. Rather they are intended to sustain and keep our people motivated. Because of the location of the mines we need such services. It is not a problem. It costs money but its part of doing business in this kind of locality.”

He said given the stage of Botswana’s national development, it is a wise decision that the mine could be assisting government in paying for some of the services that are elsewhere the responsibilities of government.

He also pointed out that it is important that services are world class if they are to achieve the goal of attracting and retaining the needed personnel.

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