Debswana diamond sales pick-up

Brian Benza
Staff Writer | Monday April 26, 2010 00:00

 

Speaking at a 2009 annual review briefing in Gaborone last week, Debswana managing director, Blackie Marole said prospects for 2010 and beyond look good and the sale of diamonds in the first three months of the year is already showing positive signs.

Due to the world economic crisis, Debswana only produced 17 million carats in 2009 down from 32 million carats in 2008 leading to a 50 percent cut in revenue to the national coffers from the diamond mining giant.

The company says it is ready to increase its production target from 20 million carats in 2010 if market conditions improve.

At $1.7 billion, the 2009 sales are 39 percent lower than in 2008. Revenue for the year is 35 percent below the 2008 mark with selling prices falling by 22 percent. Marole said the operating expenditure for the year is P1 billion below 2008 cost levels while working costs are 26 percent down.

The company said that even though 2009 was a challenging year, it put in place mitigation actions to ensure its sustainability and future growth. Marole said some of the mitigation actions included extended mine shut downs, major reductions in operational and capital expenditure and the implementation of time-critical stay-in-business projects such as Cut 8, Morupule Expansion and a power shortage mitigation project.

Marole added that despite the difficult environment the company was operating in last year, it recorded a tremendous achievement of no single fatality and fewer injuries. 'This is a commendable achievement which we intend to sustain going forward. Our goal is zero harm to our employees,' he said.

He stated that Orapa mine made the company proud by taking first position in the Best Improvement in Severity Rate competition organised by the Botswana Chamber of Mines. The Severity Rate measures the number of days lost due to injuries.

The mining sites retained their ISO 1400 I Environmental Management System certifications as well as their OHSAS I 800 I Safety Management System certifications. Marole said Debswana is proud that there were no forced redundancies as part of the Crisis Response Plan and instead a more compassionate approach was followed which aimed to preserve jobs.

Voluntary separation and early retirement schemes were offered to the 94 employees who left the company due to the economic crisis. The rest of the employees from the operations that were shut down for extended periods during the year, were redeployed to other areas in the company.

Marole said the Operations Review Project, which commenced in mid-2008 continued during 2009. Its expected outcomes are fit for purpose and ore agile organisation that will meet the challenges of doing business in the new economy.