The management of Debswana is scheduled to meet the Botswana Mining Workers Union (BMWU) on Friday to discuss the ongoing impasse regarding a 15 percent pay hike that employees are demanding.

Debswana, which has just emerged from its worst period in decades, has proposed a zero percent salary increment citing the impact of the global recession as the reason.

But the employees argue that for De Beers, which owns 50 percent of Debswana, to have recently increased salaries of its own employees, means the latter can also afford to foot a 15 percent pay hike in its Botswana aspect.

The Secretary General of BMWU, Jack Tlhagale, confirmed in an interview on Monday that the Union will hold talks with Debswana management on Friday.

He said the negotiations had gone into a "cooling off period" since the demand from employees early October. The two parties are said to have signed a Memorandum of Understanding (MOU) to go back and look at each other's reasoning.

Tlhagale said the matter is still an internal dispute, hence he could not divulge the contents of the MOU, but they were discussing with Debswana in good faith and were optimistic about the outcome.

Debswana Group Public and Corporate Affairs Manager, Esther Kanaimba-Senai, confirmed the meeting with BMWU, adding that Debswana will "continue to engage with the Union and see what comes out of it".

In earnest, employees are said to understand Debswana's position after the company just emerged from the downturn but were irked by the diamond producer's parent company, De Beers, which recently increased salaries of its employees. An employee from Orapa Mine told Mmegi Business recently that if De Beers can afford salary hikes in these "difficult times", then Debswana can also do the same.

De Beers hiked salaries of its Botswana office employees by 7.7 percent, 8 percent in Namibia and 9 percent in South Africa.

The Union is demanding a 15-percent salary increase, calculating inflation at 12.6 percent, and has added a 2.4 percent adjustment to be included in the package.

The worst global recession since World War II resulted in the collapse of the diamond market towards the end of last year, forcing Debswana to temporarily shut down some of its mines as a cost saving measure.

Things are starting to improve albeit slowly as De Beers produced 7.9 million carats in the third quarter ending September 30, which is a 40-percent decline from the same period last year.

According to an interim result statement released two weeks ago by Anglo American Plc, which owns a 45 percent stake in the company, the third quarter production brings the total output for 2009 to 14.476 million carats.

The Oppenheimer family and the Botswana Government own the rest of De Beers' shares, 40 percent and 15 percent respectively.

De Beers, which is forecast to produce only half of the 2008 output, says although the third quarter production is a decline from the comparative period last year, it is still 43 percent higher than the second quarter production.

De Beers' third-quarter production of rough was its strongest since the fourth quarter of 2008. First-quarter production barely topped one million carats, followed by 5.5 million carats in the second quarter.

Since the second quarter, production has re-started at Orapa, Letlhakane and Jwaneng Mines, while Damtshaa Mine is still closed.