GABORONE – Debswana Mining Company, equally owned by De Beers and the Botswana government, will close a diamond mine in the country as weak demand and trading disruption from the pandemic make the mining of lower value diamonds unviable, a union leader told Reuters on Friday.

Debswana, among the world's largest diamond producers, plans to close its Damtshaa mine in 2021 for a period of three years, said Joseph Tsimako, President of the Botswana Mine Workers Union.

"The mine produces lower quality diamonds which makes it expensive to dig during this period when the market is depressed," Tsimako said.

The mine is one of four operated by the company and has an average annual output of 500 000 carats, 2.5% of Debswana's total production. Its stones have a lower value than those produced at the company's flagship Jwaneng and Orapa mines.

The company will also close for an indefinite period a processing plant at Orapa Mine, Tsimako said, adding that the union is now discussing the fate of up to 500 jobs at risk from the closures.

The company and the union are discussing the redeployment of staff to other mines or voluntary separation, the union president said.

Debswana spokeswoman Agatha Sejoe said the company was still in discussions and would issue a press release on the matter in due course.

The landlocked southern African nation, which is accustomed to an influx of international diamond buyers from Mumbai and Antwerp and traders from China, closed its borders in March to curb the spread of the coronavirus.

Debswana, which provides the country with around two-thirds of its foreign exchange and contributes a fifth of its GDP, produced 12.3-million carats in the first nine months of the year, down 29 percent from the same period of 2019. Its exports have also plunged.

Authorities have forecast an 8.9 percent contraction in GDP and a doubling of Botswana's fiscal deficit in 2020.