Debswana to Halt Operations until Mid April
February 23, 09
Debswana Diamond Company announced on Monday plans to temporarily shut down its operations starting this Wednesday. Work will resume on April 15 at most of its operations. The exceptions are Damtshaa and Orapa No. 2 plants, which will remain closed until the end of 2009. The extreme steps are taken as global demand for rough diamonds dwindle and expected to remain low for many months to come. When operations resume in April, the Botswana diamond miner will produce goods at a reduced rate. The shut down of Damtshaa and Orapa No. 2 affects 580 employees. The company said in a statement that it will attempt to employee them elsewhere in the company as well as offer early retirement incentives. “Debswana has this afternoon announced a 50-day shutdown of operations, as part of the De Beers Family of Companies’ commitment across its global operations to produce in line with DTC client demand,” confirmed De Beers Spokeswoman Lynette Gould. “As inventory levels in the cutting centers shrink, and client demand expands, we will work quickly to adjust future production levels accordingly.” Meanwhile, Gould added, most of the Debswana mines are currently open and operational, with staff focusing primarily on care and maintenance measures. The shareholders of De Beers, which owns Debswana jointly with Botswana, have agreed to provide the company with up to $500 million in loans, raising concerns in the market about De Beers’s future.