GABORONE – At least 450 miners will be retrenched next week at Karowe Diamond miner following a decision by owners Lucara Diamonds to prematurely terminate a mining services contract with South African company Eqstra.
The dispute between Lucara Diamond and Eqstra, which has been simmering for months, is likely to evolve into a legal challenge after a warning by the South African company which said it would press for a repayment of damages arising from the termination of its open-cast diamond mining contract, which was due to expire in 2020.
The two parties fell out over differences in the volumes of diamond ore that was mined by Eqstra, which is a subsidiary of JSE-listed Extract.
Lucara has since notified Eqstra that its mining services contract would be terminated on December 13, 2016. The company said it would also withhold all payments to the mining contractor until the dispute over ore volumes was resolved.
However, Eqstra has denied allegations of wrong-doing and warned it would seek full compensation from Lucara Diamond for breach of the mining contract, which was valued at R500-million a year.
Discussions to ensure that the new mining contractor due to take over from Eqstra absorbed some of the 450 affected workers are underway to reduce job losses. More than 7 000 jobs have been lost following the closures of four major mine closures that have hit Botswana since October 2015.