Wednesday, May 29, 2024

Mining union has hope for diamond recovery

The recovery of global diamond market has sparked hope in the mining sector, with envisaged retrenchments looking far-fetched.

Botswana Mine Workers Union (BOMWU) have expressed hope that local mining companies will now have no reason to pursue retrenchments.

The Union President Joseph Tsimako said there have been fears within the industry that hundreds of jobs were bound to be shed off post state of public emergency.

Last year, it was reported that Botswana’s economy shrank by 24% in the second quarter of 2020 as coronavirus lockdowns at home and abroad slowed domestic economic activity and severely constrained diamond sales. Buyers of the precious gem were locked out of the capital Gaborone, where they come to purchase diamonds from De Beers.

The boom is being driven by bumper holiday jewellery sales, particularly in the vital US and Chinese markets. For years, diamonds faced growing competition from travel as a form of luxury spending. Now, with vacations on hold due to lockdowns and other restrictions, consumers are putting their disposable income into online purchases.

Tsimako said although mining companies have not retrenched miners since the outbreak of Covid-19, there however concerned by the recent developments at Debswana mining company where some employees are on the verge of losing their jobs.

“Some of the companies that were contracted are nearing the expiration of their contracts and we are told that their contracts will not be renewed in favour of citizen-owned companies, so employees will have their jobs cut.” 

He also said they are expecting mining companies to even more miners beyond state of public emergency.

“The current situation is quite heart warming because what it means is that miners’ jobs are bound to be secure beyond SOE, and it is our hope that mining companies will not temper with their job security” 

“These are difficult times and we are hard at work engaging mining companies on the future of miners and basically their welfare issues because you will understand that over the years miners have lost their jobs it was not nice” said Tsimako.

He further highlighted that the union has over 9 000 members, adding that from this number, no one has raised any fears of losing their jobs.

Tsimako stated that the recovery of diamond markets around the world will boost the mining sector, adding that the are also hopeful that other mineral commodities will follow suit to cushion job losses.

On the other hand, Economist at First National Bank Botswana, Gomolemo Basele said the outlook of recovery in mining is most likely to follow the resurgence of commodity prices.

Basele despite this, one of the challenges now is the recent position taken by the largest jewellery maker Pandora that it will no longer use mined diamonds for their designs.

“There are challenges because the world’s largest jewellery maker Pandora has switched to man-made stones produced in laboratories and that on its own it is a set back for the diamond mining industry”

“Apart from the Pandora announcement, given the way the pandemic is ravaging in India, that alone is a challenge because the Mumbai market is quite a large one because the virus could dampen the demand for diamond” said Basele.

He further stated that it is only positive in the sense that it follows the general trajectory of commodity prices and negative due to some pockets of risk.

Basele further said he does not expect mining companies to be quick to retrench given that the country still has cut 3 and cut 9 projects, adding that It will only be advisable for them to hold on to their staff complement until full recovery.


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