De Beers in Canada

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Diamond miners strike at De Beers
By Edmund Conway (Filed: 25/08/2004)

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2004/08/25/cnbeer25.xml&sSheet=/money/200...


De Beers was scrambling to keep its biggest and most lucrative diamond mines running yesterday following an illegal strike by Botswanan workers.



The diamond giant's Botswanan wing, Debswana, which produces almost 70pc of its stones, said union leaders had been ordered to appear in court after at least a third of its miners failed to appear for work.

Debswana insisted that the strike would not impair production, although union leaders claimed all four mines had been shut down.

The strikes are an unwelcome intrusion for De Beers, which is currently renegotiating its mining contract with the Botswanan government, co-owner of Debswana.

The deadline for the talks has had to be extended until the end of the year, after the company and the government failed to agree on terms this summer.

De Beers also faces competition from a number of new mines in Canada and Russia, which are touted as the growth areas for the industry in future decades.

Botswanan mining unions were told earlier this month that a strike would be illegal, but yesterday insisted that they had lost control of workers, who are unhappy with current pay conditions. The union is demanding a pay increase of 24pc and a 16pc rise in living expenses, but the management at Debswana is offering just 10pc more of each.

The International Federation of Chemical, Energy Mine and General Workers last week criticised De Beers for what it called an "inferior" and "miniscule" pay offer.

"Members of the [unions] at Debswana's mines are largely responsible for the heightened production and continual profitability of this enterprise, yet are treated like neglected stepchildren," said general secretary Fred Higgs.

A De Beers spokesman said the company had done its best to avoid a strike.

"The current situation is that a number of people remain on strike, which is contravention of a court order," he said. "We are open for negotiations when that group of people decides to speak to us.

"Clearly this is going to have an impact on production, but not, at the moment a serious impact."