Monday, March 16, 2009

Botswana: Diamonds may be forever but not jobs in the diamond mines

The rent collector arrived at a house in Boteti, a small village in central Botswana, and immediately realized something was wrong.

"The house was deserted, the curtains removed," Ratanang Otlhogile, who declined to use his real name, told IRIN.

"I thought someone had passed away and people had removed curtains, as is the norm. But it clicked in my mind that this could not be the case, as there were no mourners. A neighbour informed me that the two tenants in my house had left the previous day and said they were going to try something new elsewhere."

Boteti is one of a number of villages around the Orapa and Letlhakane diamond mines, which either employed villagers, or provided opportunities in secondary services.

Debswana Diamond Company, jointly owned by the Botswana government and diamond conglomerate De Beers, announced a one-year closure of the Damtshaa mine and Orapa Mine No. 2 plant in February.

Hundreds of staff are being offered retrenchment packages, or a one-year special leave with full benefits and 30 percent of the salary, while the company is terminating the services of contractors, amounting to the loss of nearly 1,000 jobs on the affected mines.

The Boteti community, like many other villages near mining towns, will also no longer benefit from corporate social responsibility programmes, such as road improvement and electrification of schools.

Debswana's operations in Botswana include Jwaneng, Orapa, Letlhakane and Damtshaa, which all employ open-pit mining methods to extract diamonds. Jwaneng, in south-central Botswana, is the world's richest diamond mine, and is reportedly also planning to retrench workers.

The deputy town clerk of Jwaneng, Mpho Mathe, recently told reporters that it was probable the mine would scale down services offered by its hospital, which also operates as a referral facility for smaller clinics in the area.

Global recession

The onset of a global recession has had a severe impact on the region's commodity-based economies and Botswana, the world's biggest diamond producer, has not remained unscathed.

Diamond mining has fuelled the country's development since independence from Britain in 1966 and is still a pillar of its economy, but in recent months the price of rough diamonds has fallen by as much as 20 percent and could, according to some industry observers, fall by a further 60 percent.

Rebecca Oitsile, chairperson of Boteti's Village Development Committee (VDC), told a recent meeting of the residents' organisation that many villagers relied on renting accommodation to mine workers.

"Many houses are already vacant, as the retrenched workers have since moved their stuff. This has affected many households that were surviving mostly through renting their houses to the workers," she said.

"Life will never be the same again," said Clayton Mothulwe, who owns a small tuckshop in Boteti. "Although most of them were not from this area, they had integrated well into the community and it is sad that it seems we will not be able to meet most of them again.

"For the past six years, I have been living comfortably from my earnings from this tuckshop, but the past few days have not been good. Most of my regular customers are not around," he commented.

Many youths in the area survived on casual labour, but "Since the beginning of the year, contractors have not been recruiting for piece jobs. Most of the guys are now struggling, as they spent most of their money in December," Mothulwe said.

Botswana's labour minister, Peter Siele, told Boteti villagers at the VDC meeting: "The problem is worldwide and now requires all of us to join hands in devising effective strategies to combat it."

Blackie Marole, Debswana's managing director, said, "Everyone is affected [by the global slowdown], locals and expatriates. Diamond sales are at the root of the problem."

A mineworker, who declined to be named, told IRIN: "It does not affect workers alone. It is affecting even the people we had hired to assist with other tasks at home while we are at work.

"You need people who look after the children, herd the cattle, and do other tasks at home. Now, with these developments, it would be difficult for us to pay them," he said.


Debswana's group personnel manager, Ntoti Mosetlhe, said the company was "engaging employees" in retrenchment talks, but Botswana Mine Workers Union (BMWU) said the company "just wants to see the workers on the streets with nothing".

"We have a retrenchment agreement in place that allows workers to be given competitive exit packages, but it seems the company wants to deviate from that agreement and implement its own schemes. From our assessment, that scheme will not benefit workers in any way, but will condemn them into poverty," Jack Tlhagale, the BMWU secretary-general, told IRIN.

The knock-on effect is that banks and financial institutions are not offering mine workers loans, as employment is no longer guaranteed in the current situation and the cautious approach of the banks is being extended to employees in other sectors.

Keith Jefferies, an independent economic analyst and former deputy governor of the Bank of Botswana, told IRIN: "The mining industry does not have a direct impact on the major economy, but this is going to affect companies that deal directly with Debswana and the other mining companies."

"The impact will be felt mostly among those organisations and projects that get direct funding from the government, because most of the national revenue comes directly from mining. Revenues from mining in 2009 will be much reduced, and this calls for the reduction of government spending."

Disclaimer:This material comes to you via IRIN, the humanitarian news and analysis service of the UN Office for the Coordination of Humanitarian Affairs. The opinions expressed do not necessarily reflect those of the United Nations or its Member States.
Photo: Copyright IRIN
Published by Mike Hitchen, Mike Hitchen Consulting
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