Debswana Diamond Company is well on its way to meeting the 2012 production target of 19.9 million carats, having produced 16.3 million as at October 2012.
Although this represents a reduction from last year’s production for the same period, the Company had to reduce production targets by 10% in June in response to challenging market conditions. In addition, production was affected when Jwaneng Mine stopped mining for four weeks in July, following by the slope failure incident.
The Company had planned to produce 23.9 million carats this year, this target has been reduced to 19.9 million carats. The reduction by 4 million carats is reflective of depressed market conditions which resulted in the company reducing production by 2.6 million carats, as well as the impact on production by 1.4 million carats due to the slope failure incident.
During the period to October 2012, the Company has distributed P11 billion to its shareholders, the Government of Botswana and De Beers. The Company is owned in equal shares, however, through dividends, royalties and taxes, the Government of Botswana gets 80% of the revenues. As such the Government received P8.8 billion for the period ended October 2012, whilst De Beers received P3.6 billion.
Although this represents a reduction compared to 2011 distributions, the company is satisfied that despite the challenging global conditions and diamond market, rough diamond sales have not been drastically affected.
“There is uncertainty in the global economic outlook, however consumer demand has been reasonable even though better quality goods are moving more slowly,” said Jim Gowans, Debswana Managing Director, at a media briefing held this week in Gaborone.
The Managing Director met with journalists to provide them with a business update and also discuss the 2011 Report to Stakeholders. Since 2011, Debswana has started to produce a Report to Stakeholders which focuses on sustainability covering the history, performance and future processes and objectives surrounding the ‘triple bottom line’ embraced by the Company. In 2011 distributions to the shareholders increased to P19 billion, from P12 billion in 2010. This was as a result of improved market conditions in 2011. Debswana continues to make strides in improving safety at all its operations. As at the end of October, the Lost Time Injury Frequency Rate (injuries that result in at least one day’s absence from work) was 0.08 (meaning there have been 10 injuries so far this year) against a target of 0.10. Unfortunately, there were two fatalities this year.
Debswana remains the largest private sector employer. To date, the company employs 4,595 employees, of which 96.3% are citizens and 3.7% are non-citizens.
In addition, Debswana continues to procure goods and services from local companies. In 2011, procurement spend was P3.9 billion, out of this P2.3 billion was on local spend and P1.1 billion was on non-Botswana spend. The company remains committed towards playing a pivotal role in complementing national development efforts by leveraging procurement activities to stimulate economic progress.
For the past ten years, the company has been engaged in business development initiatives to enhance local business. Since 2001, 57 foreign companies set up businesses in Botswana, with a total investment of over P190 million, creating 1,657 jobs for citizens. A total of 42 companies formed joint ventures with citizens, 50 local SMEs have been assisted and more than 2,126 new jobs created within those companies.