Botswana President Festus Mogae on Friday joined last-minute negotiations to head off a strike by approximately 5 000 miners at the country’s four diamond mines, which would severely impact on the nation’s income and the world diamond market, already facing a shortage of rough diamond stock.
”We expect a statement by noon,” human resources manager for the mines Jacob Sesinyi said.
Botswana relies heavily on its diamond industry, which generates 85% of export earnings, a direct 50% of government revenues and 40% of gross domestic product. The diamonds are mined by Debswana, a 50/50 partnership between De Beers and the Botswana government.
The country is the world’s largest diamond producer by weight and value.
It produces 30-million carats of diamonds a year, which include 70% of the gems marketed by the De Beers Diamond Trading Company — equating to 35% of the world’s gem diamonds.
”We view the threat of a strike as extremely serious as it would obviously interrupt production and hence have a negative effect on income going to shareholders,” Debswana said in a statement as the wage talks deadlocked in July.
”With the effects of lower [pula] income from Debswana last year due to the weaker United States dollar, we are indeed concerned.”
In February, Botswana devalued its pula by 7,5% to boost pula diamond income.
In its July bulletin, the Antwerp High Diamond Council reported a shortage of rough diamonds.
”There was good growth in retail sales of diamond jewellery during the first half of 2004 compared with the same period last year and De Beers has admitted that demand is not being met in terms of rough diamond supply,” the council said.
Debswana started its wage negotiations with the Botswana Mine Workers’ Union with an offer to increase the cost of living allowances by 4%. Through the negotiation process it raised this to 10%, plus a one-off production bonus of 5% of annual salary, as well as a housing allowance ranging from 400 pula to 1 100 pula a month.
The union presented a demand for a 30% increase in the cost of living allowance. At the deadlock on July 15, it was demanding 16% plus a 25% production bonus.
Other diamond and mining operations in the country have settled for cost-of-living increases significantly below this. The Debswana-owned Botswana Diamond Valuing Company settled for 8%, the also Debswana-owned Morupule Colliery for 7% and the BCL copper and nickel mine also for 7%.
The commissioner of labour has concluded that the talks have failed and has a certificate allowing either party to refer the matter to the Industrial Court. He also advised of the option of arbitration, which the union has rejected, and has expressed its intention to strike.
Debswana’s spokesperson on the joint negotiating committee, SO Sebetlela, has told workers that those who strike will not be paid; and should the strike be ruled illegal, appropriate disciplinary action, including dismissal, will be taken against them. — Sapa