Firestone Diamonds Suspends Operations in Botswana's BK11 Diamond Mine
3/1/2012 8:04:11 AM Shira
In a surprise move, UK-based Firestone Diamonds has suspended operations at Botswana’s BK11 diamond mine and placed the mine on a temporary maintenance program. The company attributes the closure to weak market demand for precious stones and operational issues. The future of about 200 mine workers hangs in the balance and the closure apparently comes as a surprise to the Botswana Mine Workers Union (BMWU), who had been negotiating an agreement with the mine's management.
"We remain committed to the operations in Botswana and the program at BK11 is a temporary measure that has been designed to enable a rapid re-start of operations when the technical and market challenges have been resolved," said Firestone CEO Time Wilkes.
BK11 mine began production in 2010 and was on a growth trajectory. Firestone now plans on re-shifting its focus to its flagship Liqhobong Mine in Lesotho, which is expected to produce 1 million carats by 2014.
"The suspension was a shock to us because they never indicated that they were facing any problems when we were in discussions on the agreement….I was at the mine yesterday and the general manager told me they were awaiting final letters from head office which will say who's going and who's staying,” said BMWU coordinator, Abel Buka.
According to worker’s union officials, the suspension of mine operations coincides with the signing of a recognition agreement beneficial to employees, although Firestone official cites the global recession and technical challenges as the reason. In December 2011 Firestone had announced that diamond prices fell by approximately 30 percent.