Capital Resources said in a report released during the Botswana Resource Sector Conference that Debswana is planning to continue producing diamonds below capacity in line with De Beers’ New Normal strategy, which seeks to prolong the life span of its mines by moderating production.
To find out whether Debswana had mulled such a plan, Rough & Polished’s Mathew Nyaungwa talked to the group public and corporate Affairs manager, Esther Kanaimba-Senai.
She said the global economic recession had been a “big learning curve” for Debswana and will not be quick to celebrate the full recovery of the diamond industry despite the recent increase in demand and prices.
Debswana produced 22.2 million carats in 2010, 4.5 million more than the 17.7 million carats produced in 2009. What contributed to this increase in output?
In 2010, the demand for diamonds in the international market went up thus prompting us to also increase our production. Furthermore, the 2009 production was substantially low due to the international financial crisis, which was at its peak in that year.
There had been conflicting figures regarding Debswana’s targeted output for 2011. Can you put the record straight?
Debswana’s production target for the year 2011 is 25 milion carats.
How does Debswana view the current state of the diamond industry?
While there has been a welcome improvement in the international diamond industry, in terms of an increase in demand for diamonds, Debswana is still treading with caution while monitoring the industry closely after the recession. The recession was a big learning curve for us as for the first time in our 40 year history we were forced to close our mines for four months. We continuously review the way we conduct our business to ensure that it is responds to the market.
Can you give a brief update on Debswana’s Cut-8 expansion project at Jwaneng mine?
The project is progressing according to plan, with waste removal on target. The relocation of the workshops and parts of the plant that will be affected by the expansion of the pit is also going according to the plan. Arrival and assembly of new equipment (trucks, shovels and drills) is also progressing well. The project continues to make a contribution to the community of Jwaneng through the growth of local businesses and other legacy projects.
Debswana came under heavy criticism for awarding contracts to foreign firms ahead of locals as it pushes ahead with the Cut-8 expansion project. What is your comment?
The Cut 8 Project is a complex project that requires skills that are not readily available in Botswana. That is why the contract was awarded to a global and reputable Engineering, Procurement and Construction Management (EPCM) firm, Fluor. However, local companies are being sub-contracted to provide a variety of services to the Cut 8 project team. Consequently, a significant amount of project funds is spent locally.
Debswana’s safety performance for 2010 deteriorated when compared to 2009. What is the company doing to ensure maximum safety at its mines?
The year 2009 was a low activity year so one would naturally expect fewer incidents. However, Debswana as a way of ensuring the realisation of its safety commitment of ‘zero harm to people’, the company has embarked on the implementation of the Safety, Health and Environment (SHE) Risk Management programme, which seeks to assess SHE risks right across the business to enable all employees to become SHE agents and thus manage risks before they turn into incidents. The company continues to provide various SHE training for all its employees as we collectively play our role towards the realisation of our zero harm safety goal.
Botswana had been facing power shortages, a move that saw Debswana considering the expansion of Morupule Coal Mine. Is the company diversifying from its core business?
Morupule Colliery is a Debswana subsidiary that continues to operate to meet its primary objective of providing coal to Botswana. The expansion of the Colliery does not mean that the company is diversifying from its core business of diamond mining; it just attests its commitment to meeting local demand, as the sole supplier of coal in Botswana.
What is Debswana doing to complement the government’s bid to boost beneficiation in the country?
The government has set up the Diamond Hub which is mandated with handling issues which include beneficiation. Debswana acts as an enabler by generating the necessary revenue needed by the government to drive those programmes that are meant to bring beneficiation to Botswana. Furthermore, Debswana together with De Beers Holdings Botswana are 50-50 shareholders in Peo Venture Capital, a business development entity set up in 1997 to support the development of commercially viable enterprises, contribute towards the creation of sustainable employment, to promote beneficiation and to facilitate the transfer of entrepreneurial skills.
We have seen Firestone Diamonds conducting private diamond auctions in Gaborone since December last year. What impact does this have on Debswana?
This has no impact on Debswana business. Since inception in 1969, Debswana has been selling its diamonds through the Diamond Trading Company International, which now has a subsidiary in Botswana as per the sales agreement between the Botswana Government and De Beers.
Mathew Nyaungwa, Rough&Polished and
Alexandr Shaburkin, Rough&Polished, Windhoek
