Tati Nickel, the giant copper/nickel miner urged its employees Friday to opt for voluntary exit as the company tries to duck-out of a full-blown impact of the global economic crunch.
Tati Nickel General Manager, Sebetela Sebetela, told Sunday Standard Friday “though it is still an internal issue, what we have done is to ask employees to opt for voluntary separation for those who are interested.
“We are affected like everybody else and what we are trying to do is to manage the issue of global economic crisis,” he said.
The move by Tati Nickel seriously puts Finance Minister, Baledzi Gaolathe’s budget projections into some serious doubt given the fact that the country’s biggest foreign earnerÔÇöthe mining sector ÔÇô appears to be badly affected than at the time of the budget speech.
The mining sector accounts for over 50 percent of the GDP and over 70 percent of the country’s exports.
Debswana, the country’s biggest cash-cow shut-down all its four mines during the week for two months while Orapa Number 2 Plant and Damtshaa mines will remain closed for the entire year.
The development will result in the scaling down of production from 34 million carats to about 13 million which, if government wants to achieve 50 percent revenue, will have to hike the rough diamond prices. However, the cash stranded cutting and polishers are not prepared to go for any goods which are at the current prices or beyond.
“We have just started taking the process to our employees and at the moment we can not say how many people are prepared to go,” Sebetela said Friday night.
The move comes at a time when metal prices, which have been bolstered by the Chinese demand, have gone down by as much as 70 percent since the global economic crisis started to spill-over to Botswana.
Tati Nickel, a subsidiary of the Russian titanic nickel miner Norilsk Nickel’s 1182 employees are likely to be the latest casualties of the global downturn that is threatening to leave Francistown as a ghost town.
Analysts were on Friday already painting a bleak future over the economy of Francistown and the banking sector in general.
“This is going to be critical. If someone leaves Debswana they normally think of Tati Nickel and these people have gone into investment based on the life-span of the mine. They have taken loans from the commercial banks either to buy property or do something.
“This is going to squeeze everybody out. The level of disposal income is also going to be affected,” Chief Executive Officer of Stockbrokers Botswana, Geoffrey Bakwena, said on Friday night.
His comments were backed by Leutwetse Tumelo, the chief executive officer for Capital Asset Management, who said: “Tati Nickel has been a driver of Francistown economy. This is going to have a negative impact given the fact that it has driven up the property market in that town,” he said.
Employees at the mine said Friday that it seems management has now come to a firm decision on the next course of action, as employees were informed of the voluntary separation exercise which will commence from 1st of March to 31st April. They claimed that if the separation exercise fails, management may then embark on a retrenchment exercise.
The move comes months after Tati Nickel’s sister company, Botswana Metal Refinery, embarked on a retrenchment exercises that saw all of its 300 employees, save 23 of them, being retrenched.