Weak diamond market claims scalp as Debswana Mining prepares to shut Damtshaa

WEAKNESS in the diamond market this year has led to the proposed closure of Botswana’s Damtshaa, a mine owned by Debswana Mining Company, said Reuters.

Debswana Mining is jointly owned by the Botswana government and De Beers, the 85%-controlled Anglo American firm.

Citing Joseph Tsimako, President of the Botswana Mine Workers Union told Reuters the mine would be closed in 2021 for about three years.

“The mine produces lower quality diamonds which makes it expensive to dig during this period when the market is depressed,” Tsimako said.

The mine is one of four operated by Debswana and has an average annual output of 500,000 carats, 2.5% of Debswana’s total production. Its stones have a lower value than those produced at the company’s flagship Jwaneng and Orapa mines, said Reuters.

The company will also close for an indefinite period a processing plant at Orapa Mine, Tsimako said, adding that the union is now discussing the fate of up to 500 jobs at risk from the closures.

The company and the union are discussing the redeployment of staff to other mines or voluntary separation, the union president said.

Debswana spokeswoman Agatha Sejoe said the company was still in discussions and would issue a press release on the matter in due course.

The diamond market was recovering, but no-one is sure how sustained it would be amid fresh Covid-19 related lockdowns.

De Beers last month registered diamond sales totalling $467m for its eighth sight – a 40% increase over the confirmed seventh sight sales – in a sign that the diamond market continued to improve ahead of its key Thanksgiving and Christmas festivals.

“We continue to see a steady improvement in demand for rough diamonds in the eighth sales cycle of the year, with cutters and polishers increasing their purchases as retail orders come through ahead of the key holiday season,” said Bruce Cleaver, CEO of De Beers Group.

But he struck a note of caution, saying it was “early days”, and that there was “… a long way to go before we can be sure of a sustained recovery in trading conditions”.