Thursday, February 26, 2009

Debswana and Anglo American Downsize Workers in Precious Metals Industry

Botswana diamond firm shuts mines

Debswana, a diamond producing firm jointly owned by Botswana's government and De Beers, will close two mines for the rest of the year as demand falls.

Debswana's four diamond mines will close on 25 February, but two of them will resume work on 14 April.

Its Damtshaa mine and Orapa No 2 Plants will be closed till the end of 2009, directly affecting 580 employees.

These workers will be redeployed within the company or offered voluntary early retirement and other incentives.

"These actions are being taken to mitigate the effects of the global downturn by reducing production during 2009 to align with demand, conserving cash for the company, protecting employment and maintaining readiness for an eventual upturn in the market," said De Beers.

Diamond giant De Beers, the world's largest diamond producer by value, said in a statement last week 48.1 million carat in 2008, while Debswana produced 32.3 million carat, down 4% from 33.6 million carat in 2007.

The ongoing global financial and economic crisis forced even wealthy consumers to cut their spending on luxury goods, including jewellery.

Luxury-jewellery retailer Tiffany said in January its same-store sales for the holiday season fell by 24%.

Story from BBC NEWS:
Published: 2009/02/23 17:14:06 GMT

Anglo American to cut 9,000 jobs

Mining giant Anglo American has said it is to cut an additional 9,000 jobs as the global economic downturn hits demand for raw materials.

The losses come on top of the 10,000 job cuts that Anglo's South African unit, Anglo Platinum, had already announced earlier this month.

The job cuts follow similar moves at rivals Rio Tinto and BHP Billiton.

Anglo also announced a 3% fall in 2008 pre-tax profit to $8.57bn (£6bn) and warned that 2009 would be tough.

A spokesman said the job cuts would be across the group's operations, which are mainly in South Africa, South America and Australia.

Mining companies have seen a dramatic turnaround in their fortunes as the downturn hits home.

A boom in the price of metals and other commodities, sustained by China's once insatiable demand for raw materials, has to come to end.

Unprecedented uncertainty

Cynthia Carroll, Anglo's chief executive, said that the effects of the economic downturn "were difficult to overstate".

"The world economy faces an unprecedented level of uncertainty," she said.

"The outlook remains poor in the near term, with expectations for continuing volatility and weakness in commodity prices."

She added that the board had decided to halt dividend payouts to shareholders to conserve cash. The credit crunch has made financing harder to obtain.

Both prices and demand for nickel, platinum, iron ore and coking coal, used in steel production, had declined significantly, the company said.

Anglo American's downbeat assessment of the industry's prospects hurt the share prices of other mining firms.

Rio Tinto shares ended 10% down, while Xstrata fell 11%.

Anglo American shares ended 17% lower at 1027 pence.

Story from BBC NEWS:
Published: 2009/02/20 21:27:06 GMT

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