Bots diamond revenue declines
Gaborone ‑ Botswana’s revenue from its mainstay, diamond slumped this year to R9.75 billion for the period ending October 2012.
Debswana Diamond Company says it has already distributed R12b to its shareholders, the government of Botswana and De Beers.
Diamonds have propped Botswana's economic development and account for around a third of the country's gross domestic product.
Speaking at a media briefing recently, Debswana Managing Director, Jim Gowans, revealed that although this was a reduction compared to 2011 distributions, the company was satisfied that despite the challenging global diamond conditions and diamond market, rough diamond sales had not been drastically affected.
He expressed optimism that they were well on their way to meeting the 2012 production target of 19.9m carats, having produced 16.6m as at October 2012.
According to Gowans, Debswana had planned to produce 23.9m carats this year, but the target was reduced to 19.9m carats.
He said the production reduction due to global market downturn amounts to 2.6m carats while the Jwaneng Mine fatality in June this year resulted in a revised 8.1m carats, reflecting a reduction and variance of 1.4m carats and -2.4, respectively.
“This reduction is reflective of depressed market conditions which resulted in the company reducing production by 2.6m carats, as well as the impact on production of 1.4m carats due to the slope failure incident at Jwaneng Mine in which one miner died,” Gowans explained.
“There is uncertainty in the economic outlook globally. However, consumer demand has been reasonable even though better quality goods are moving more slowly,” Gowans added.
Gowans further said that Debswana had planned to produce 23.9m carats this year but this target has been reduced to 19.9m carats.
“The reduction by 4m carats is reflective of depressed market conditions which resulted in the company reducing production by 2.6m carats, as well as the impact on production by 1.4m carats due to the slope failure incident,” Gowans says.
Figures show that by October this year, Debswana had produced 16.3m carats against a target of 19.9m for the year 2012.
“Although this represents a reduction from last year’s production for the same period, the company had to reduce production targets by 10 percent in June in response to challenging market conditions,” the Debswana Managing Director. He said since 2011, distributions to shareholders increased to R21b from R13.3b in 2010 adding that Debswana still remains the largest private sector employer with 4 595 employees, of which 96.3 percent were citizens. He noted that the company continued to procure goods and services from local companies, with the local procurement spent for 2011 standing at R2.5b.
Over the past ten years, Gowans said, Debswana had engaged in business development initiatives which resulted in 57 foreign companies setting up business in the country with a total investment of over R210.6m, creating 1 657 jobs for citizens.
* 1 pula = 1.1086 rand