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De Beers Retrenches As AfricanOperations Slowdown

Staff Writer
In line with De Beers' decision to scale down, the company's African operations are starting to reduce production. In South Africa, Namibia and Botswana staff levels have been reduced, most on early holiday leave some of whom are not expected to return.

 

Botswana - the site of De Beers' most important mines - has been hit hard by the drop in rough diamond sales. At the last DTC Botswana Sight, many sightholders chose to not take the goods, leaving the company with unwanted diamonds.


Work at the Jwaneng, Orapa and Letlhakane diamond mines has also been reduced, with staff going on early holiday vacation. While lay-off plans are not clear, like its sister companies elsewhere in Africa, Debswana is considering its options. As De Beers Consolidated Mines' (DBCM) Tom Tweedy said, it all hinges on holiday sales.

"De Beers has been reviewing the prevailing level of demand for rough diamonds from the DTC clients during the past several weeks, and has been fully prepared to adapt its production plans as necessary," said De Beers Group Media Relations Manager Lynette Gould.

"High inventory levels and low liquidity have combined to impact wholesale clients' ability to purchase new rough diamond supplies, and De Beers will take immediate steps to reduce production for the remainder of 2008, and early into 2009, across its global mining operations, bringing it in line with client demand," Gould adds about the cause of the production decrease.

"De Beers will continue to respond to DTC clients' needs, particularly following the Christmas and Chinese New Year retail selling seasons, and adjust production levels accordingly."In South Africa, De Beers Consolidated

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Mines extended employee holiday vacations by ten production days, starting December 15 and returning January 12.

The company is not planning any lay-offs, according to DBCM spokesman Tom Tweedy, however it is already considering a number of scenarios for 2009 production. A decision will be made in January after holiday sales results come in.

DBCM mines are currently operating with a minimal crew, made up mostly of safety, security and environment teams.

At Namdeb and De Beers Marine Namibia, staff retrenchments are inevitable, according to a Friday release. As part of the production scale back, mining ships will be brought back to port where they are likely to stay moored from mid-December until an unspecified date in early January.

"This will inevitably result in a reduction in the required number of employees," said Ndeshi Hangula-Shikwambi, Namdeb's manager for corporate communications. "We will consult openly and fully with any affected employees, and with the Mineworkers Union, to ensure that we meet all the statutory requirements."

Inland, mining is slowing down to a single shift a day from the regular double shifts and previously announced maintenance work is taking place.

If the US market decides to purchase diamond jewellery, money will run up the pipeline to wholesalers and from them to manufacturers and producers, offering financial relief as well as some peace of mind.
(Additional reporting by idexonline)



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