About 22 workers will be retrenched from Sperrgebiet Diamond Mining (SDM), which has been operating for about eight months.
The retrenchments are effective from 15 July.
In a letter to the Office of the Labour Commissioner, dated 12 June and seen by The Namibian, the company’s acting chief executive officer, Abraham Grobler, said 22 employees will be affected by the retrenchments.
He said the retrenchments are due to operational requirements.
The initial number of people to be retrenched was 60, but after negotiations with the employee representative committee and a careful evaluation of alternative measures, the number was revised to 22.
“As part of the alternatives to retrenchment, 18 employees will be seconded on a temporary basis to the company’s Zimbabwe operations.
“However, if by 1 December SDM’s operations have not resumed, then these 18 employees may also have to be retrenched,” Grobler said.
He said the move is necessary because the current diamond carat production and recovery rates have not met expected levels.
Grobler assured that retrenched employees who were not accommodated would receive priority consideration when recruitment and the restart of operations take place.
However, several sources at the mine say there have been problems obtaining funds to settle previous debts since the mine’s onset.
The sources are raising concerns over investors’ conduct and a lack of transparency.
These issues have reportedly led to the resignation of the company’s chief executive officer in December.
The sources also note liquidity problems, as investors are heavily invested in projects in Zimbabwe and is struggling to meet financial commitments in Namibia.
Lewcor Holdings, a 75% shareholder, withdrew from the deal in March, citing outstanding debts of over N$40 million.
Grobler described the debt owed to Lewcor as a commercial problem to be solved.
“It’s not in mitigation and disgust. There is a commercial problem, and it should be solved,” he said.
Grobler acknowledged the adverse impact of downsizing on the local community and expressed the company’s desire to contribute positively.
“We want to contribute to the community, but you can only do it with a feasible mine.
“There is no way you can run a mine that’s not feasible. You have to determine feasibility and sustainability,” he said.
SDM took over the operation of the mine, formerly known as Elizabeth Bay, from Namdeb in 2019.
The mine was established by Lewcor Holdings, alongside MSF Commercials and businessman David Sheehama.
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