Namdeb Plans to Retrench - by Desie Heita
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WINDHOEK - Several employees at Namdeb and De Beers Marine Namibia will go on an early holiday while others will not return to work immediately after the holiday season, as the diamond mining giant attempts to cut diamond production for December and early 2009.
The current world economic chaos has resulted in reduced demand for diamonds.
Namdeb will temporarily stop most mining operations until some time early next year. A single shift will replace the double shifts and, on several mining sites, employees at work are only those needed to carry out essential maintenance work. Further, De Beers Marine will anchor its diamond mining vessels in port from mid-December until early 2009.
"This will inevitably result in a reduction in the required number of employees. We will consult openly and fully with any affected employees, and with the Mineworkers Union, to ensure that we meet all the statutory requirements," said the Manager for Corporate Communications at Namdeb Diamond Corporation, Ndeshi Hangula-Shikwambi.
The economic crisis sweeping across the world has had an impact on employment levels across all industries, and it is inevitable that there will be an impact on diamond-related jobs until the global economy begins to recover.
Hangula-Shikwambi said high inventory levels and low liquidity have combined to impact wholesale clients' ability to purchase new rough diamond supplies, and Namdeb and De Beers Marine Namibia will take immediate steps to reduce production for the remainder of 2008 and early 2009 in line with prevailing demand.
"Operations in the De Beers Family of Companies around the world are carrying out similar exercises, while trying to mitigate the impact on employees as much as possible," said Hangula-Shikwambi.
Namdeb and De Beers Marine, however, said their employees are the first priority.
"We will strive to minimise the impact on them through production holidays and flexible working arrangements," Hangula-Shikwambi said.
Namdeb has reviewed the demand for rough diamonds from the Diamond Trading Company (DTC) clients, and found that although prices for polished diamonds remain above the levels observed at the beginning of the year, the wholesale market for new rough diamonds in the major cutting centres has been impacted by the global economic crisis, principally because of liquidity issues.
"This is driving DTC's clients to correct their inventory levels and thus having a negative effect upon their ability to purchase new rough diamonds," said Hangula-Shikwambi.
Nevertheless, Hangula-Shikwambi said the long-term dynamics of the diamond industry remain strong, with future demand growth likely to come from the emerging markets of China and India. The demand from the two emerging markets is likely to significantly outpace the forecast lower levels of global diamond production for many years to come.
Hangula-Shikwambi said Namdeb, De Beers Marine Namibia, Namibia Diamond Trading Company and De Beers Namibia are developing a strong action plan.
The action plan aims at reducing production levels to be in line with prevailing demand from the DTC clients, minimising the negative impact on employees, communities and Namibia at large, and to ensure that the diamond group emerges stronger from the prevailing downturn, ready to realise the benefits of a recovered world economy.
Hence the decision to anchor vessels and halt mining operations, said Hangula-Shikwambi.
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The current world economic chaos has resulted in reduced demand for diamonds.
Namdeb will temporarily stop most mining operations until some time early next year. A single shift will replace the double shifts and, on several mining sites, employees at work are only those needed to carry out essential maintenance work. Further, De Beers Marine will anchor its diamond mining vessels in port from mid-December until early 2009.
"This will inevitably result in a reduction in the required number of employees. We will consult openly and fully with any affected employees, and with the Mineworkers Union, to ensure that we meet all the statutory requirements," said the Manager for Corporate Communications at Namdeb Diamond Corporation, Ndeshi Hangula-Shikwambi.
The economic crisis sweeping across the world has had an impact on employment levels across all industries, and it is inevitable that there will be an impact on diamond-related jobs until the global economy begins to recover.
Hangula-Shikwambi said high inventory levels and low liquidity have combined to impact wholesale clients' ability to purchase new rough diamond supplies, and Namdeb and De Beers Marine Namibia will take immediate steps to reduce production for the remainder of 2008 and early 2009 in line with prevailing demand.
"Operations in the De Beers Family of Companies around the world are carrying out similar exercises, while trying to mitigate the impact on employees as much as possible," said Hangula-Shikwambi.
Namdeb and De Beers Marine, however, said their employees are the first priority.
"We will strive to minimise the impact on them through production holidays and flexible working arrangements," Hangula-Shikwambi said.
Namdeb has reviewed the demand for rough diamonds from the Diamond Trading Company (DTC) clients, and found that although prices for polished diamonds remain above the levels observed at the beginning of the year, the wholesale market for new rough diamonds in the major cutting centres has been impacted by the global economic crisis, principally because of liquidity issues.
"This is driving DTC's clients to correct their inventory levels and thus having a negative effect upon their ability to purchase new rough diamonds," said Hangula-Shikwambi.
Nevertheless, Hangula-Shikwambi said the long-term dynamics of the diamond industry remain strong, with future demand growth likely to come from the emerging markets of China and India. The demand from the two emerging markets is likely to significantly outpace the forecast lower levels of global diamond production for many years to come.
Hangula-Shikwambi said Namdeb, De Beers Marine Namibia, Namibia Diamond Trading Company and De Beers Namibia are developing a strong action plan.
The action plan aims at reducing production levels to be in line with prevailing demand from the DTC clients, minimising the negative impact on employees, communities and Namibia at large, and to ensure that the diamond group emerges stronger from the prevailing downturn, ready to realise the benefits of a recovered world economy.
Hence the decision to anchor vessels and halt mining operations, said Hangula-Shikwambi.
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