Namdeb back to work

NAMDEB’S three-month production holiday comes to an end this week, as the national diamond producer prepares to resume mining activity by mid-July.

The break in production started at the beginning of April as an added cost-saving measure to the actions that Namdeb began taking in November last year, amidst the uncertainties in the diamond industry inflicted by the global economic crisis. Other measures included reduced production schedules and a voluntary separation exercise, which saw 578 employees leave the company’s employ.In a press release issued yesterday, Namdeb’s Group Manager for External Affairs & Corporate Communications, Hilifa Mbako, said that since the end of last year, Namdeb has been positioning itself for the new business environment in which it has to operate, given the effect of the economic downturn on luxury goods.’During this period a number of initiatives to reduce operating costs, maximise cash flow and alleviate the impact on employees have been taken. Additionally, Namdeb had revised its mining plans for 2009 in line with client demand, and built into those plans the capacity to change production to meet evolving demand in the market. By being proactive then, we put ourselves in a position to expand the business when the economic recovery begins,’ Mbako stated.He said Namdeb workers would start returning to work this week and undergo a two-week reorientation process in aspects of safety, health and environmental standards, with production to resume by mid-July.During the holiday, workers remained on full pay while maintenance was carried out on assets at the mines ‘to ensure the mines run at optimal level as demand begins to recover’.But production will not necessarily reach full capacity, as diamond demand remains relatively low.’Namdeb’s production for the rest of the year will be dictated by demand. Given the reduced demand for diamonds – it follows that the final production numbers will be less than what would have been originally planned,’ Managing Director Inge Zaamwani-Kamwi said last week.She added, however, that once a recovery comes – which she says is certain – the operational changes that the company has had to put in place will place it in a better position in the long run.’We are going to come out of this in a stronger position than when we went into it in terms of our organisational efficiency and cost base, and when that happens it will allow us to get refocused on our long-term vision, which is one with a lot of excitement,’ Zaamwani-Kamwi said.’The first quarter of 2009 was a challenging time. The men and women that work for Namdeb responded swiftly to the global downturn, enabling the company to withstand the economic crisis.’This accomplishment is all the more meaningful when considering the fact that, in the long term, with future growth in emerging markets, demand is likely to significantly outpace what is forecast to be lower levels of diamond supply for many years to come,’ she added.But while Namdeb employees can look forward to a return to work, thousands of past and present employees in the diamond industry worldwide remain uncertain of their futures.In Namibia, Government’s beneficiation strategy, aimed at developing the downstream diamond cutting and polishing sector, has suffered a major blow, with some operations having to close down prematurely, go on maintenance, and/or retrench staff. Namdeb contractors, too, have been dealt a blow, with many being forced out of business.Both these activities, as well as resuscitated contributions from Namdeb to Government coffers through tax contributions and dividends, are dependent on an improvement in diamond demand, which several sources forecast may not change noticeably before the end of 2010.Namibia’s diamond production for 2009 is estimated at around 800 000 carats – down from the 2,1 million carats recorded in 2008. ‘This represents a contraction in output of close to 63 per cent compared to declines of 48 per cent and 60 per cent projected in February and April, respectively’ and shows that while the return to production is a positive sign for future growth, a return to pre-crisis levels is still a long way off.nangula@namibian.com.na