Debswana Gets $110 million Credit Line

Debswana has arranged for a P750 million ($110 million) loan facility from a number of local banks, Debswana Managing Director Blackie Marole said on Wednesday. The company saw its cash flow drop sharply as it slowed down mining operations to accommodate for declining demand in late 2008 and early 2009.

“This is not a normal loan agreement as per se. But we have made arrangements with different banks to lend us money whenever our requirements for cash rises and at the moment, we have not started utilizing the facility,” Marole was quoted by Mmegi.

“Although there were virtually no sales in November and December last year, demand has begun to improve in the past few months. It is just that we are not generating enough cash to maintain our normal operations and at the same time, have something else for the shareholders,” Marole said.

“But there is optimism that  the recovery  of the market has begun   and there are indications that prices could be firming as well and hopefully we will get back to our normal average sales of around $300 million a month,” he added.

Debswana, a joint venture between De Beers and Botswana, resumed mining operations at most of its sites in April. Namdeb, the De Beers Namibian joint venture, is scheduled to renew its diamond mining operations in a number of weeks.