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Orapa Mine Plant One Shuts Down

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  • 500 jobs to be lost
  • Damtshaa to be placed under care and maintenance
  • BMWU against retrenchments

GAZETTE REPORTERAbout 500 jobs will be lost as Debswana Diamond Company announces permanent closure of Orapa Mine Plant 1 as Damtshaa Mine nearby goes under care and maintenance indefinitely.

Ongoing market challenges and diminished revenues as a result of the global economic recession induced by COVID-19 have further prompted Debswana to accelerate implementation of its transformation programme.

According to Debswana Head of Corporate Affairs, Rachel Mothibatsela,at the forefront of the accelerated long-term initiatives is retirement of two assets at the Orapa, Letlhakane and Damtshaa Mines (OLDM) operation: permanent closure of the aged Orapa Mine Plant 1 which is now over 48 years old and placement of Damtshaa Mine, which is a marginal operation, under care and maintenance

“It is however important to emphasize that the OLDM assets closure initiative is not a reaction to the COVID-19 impacts but rather a pre-existing strategy that commenced before the COVID-19 crisis to address current mining complexities and to set us on course toward achieving our long-term objective to modernize our mining operations,” she explained.

Orapa Mine Plant 1 started running in 1972. Mothibatsela says the plant has served the company well and that plans have been in the pipeline for some time to shut it down completely due to low profitability, structural deterioration that presents increasing challenges regarding safety management, as well as high expenditure on structural repairs and operating costs. Debswana has therefore determined that there is no business case for continuing to run this plant.

Orapa production will be focused on the existing No 2 Plant with increased capacity. Damtshaa Mine is currently at waste mining phase, and due to current market conditions, raises marginal cash flow that is outweighed by operational costs. “The mine will go into care and maintenance for an indefinite period,” Mothibatsela said. “These actions will support Debswana’s ability to continue to invest in production capacity expansion projects that are essential to its positive long-term future.”

She added that key to these trans-formation initiatives, especially the current one of asset closures, is meaningful engagements with all stakeholders, especially unions and regulators. “Consultations are ongoing in this regard,” she said. “For the asset closures specifically, approximately 500 jobs will be affected. However, it is important to emphasize that the company is still in consultations with the Botswana Mine Workers’ Union and the broader employee base to explore the various options which include possible redeployment of employees to other areas of the business and voluntary mutual separation.”

But in an interview with this publication, the president of the Botswana Mine Workers Union (BMWU), Joseph Tsimako, said they have proposed a counter-strategy to help Debswana avoid forced retrenchments. Under the proposal, workers who opt to voluntarily exit would do so on their own volition while those who still want to remain with the mine would be absorbed in all Debswana vacant posts.

“Besides that, we have requested Debswana to halt all recruitments,” Tsimako said. “By so doing, the giant mining company would be an example to others in the same situation. All this is meant to avoid forced retrenchment.”

At Debswana, Mothibatsela said the final course of action will largely depend on the outcome of consultations. Debswana is fully cognizant of current limitations placed by regulations under the State of Public Emergency with regard to employee rationalizations,” she noted. “Debswana reassures employees and the public at large that this process is being executed conscientiously under the guidance of the applicable regulations,” Mothibatsela said

Following impact of the COVID-19 pandemic on global economic activity, Debswana provided an update on its 2024 strategy and the associated impact of the pandemic. As with most economic sectors, COVID-19 has had a substantial impact on the diamond industry. Accord-ing to Mothibatsela, this has accelerated the existing need for the Debswana business to make changes in order to ensure it is optimally positioned for its long-term future.
She said the Debswana 2024 Strategy, which is styled “One Dream, One Team 2024,” has been developed in recognition of this requirement and will drive a number of projects over the next few years aimed at building resilient and cost-effective operations and an organisation that can withstand market volatilities, maintain profitability and deliver shareholder and stakeholder value in the long-term.
She added that driving this strategy will be a number of key strategic initiatives delivered under the pillars of “Safety, Environment & Communities (Building Forever),” “Efficiency and Productivity Improvement,” “People Transformation,” “Innovation and Digital Transformation,” and “Debswana Tomorrow” which are about successful execution of large mine life extending projects essential to Debswana’s future.
Mothibatsela believes these strategic initiatives will transform Debswana to put a strong emphasis on more effective use of technology and data, digitisation and automation.
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