MASERU — The government has transferred the mining lease for the Kao Kimberlite pipe to Namakwa Batla Diamonds Pty Limited.
The department of mines and geology in the Ministry of Natural Resources announced the development in a press release last week.
The previous operator was shut down after going bankrupt.
Namakwa Batla Diamonds is a joint venture between Namakwa Diamonds and South Africa-based Batla Minerals South Africa, the government of Lesotho and some local investors in the country and is based in the country. Namakwa Diamonds is a Lesotho-based company which will be in charge of local operations.
The new operator has since set aside US$6.6 million (M48.44 million) to pay creditors of the former operator of Kao diamond mine.
The company has said the claims against the old operator are “subject to verification by the appointed liquidators and potential reduction.”
Namakwa Diamonds and Batla Minerals SA jointly hold a controlling 62.5 percent stake in Namakwa Batla Diamonds, while the government of Lesotho has a 25 percent holding, with the remaining 12.5 stake in the hands of individual local investors.
“Kao represents a genuinely exciting development for the company, signalling a move into a new Southern African geographical region and our first kimberlite project,” said Namakwa chief executive officer Nico Kruger in the statement.
According to Namakwa Diamonds the Kao kimberlite is estimated to have total resources of about 117 million tonnes containing an estimated 12.4 million carats.
The company said it had set a production target of Kao to 10 million tonnes of kimberlite in the next five years.
“The company intends to develop Kao from its current internal resources and management anticipate 10 million tonnes of kimberlite being processed for the recovery of 700 000 carats, over a five year period,” Namakwa diamonds stated in the statement.
Production at Kao kimberlite is expected to increase to 5 million tonnes per year for the projected life expectancy of 40 years.
Kao’s main kimberlite is said to be the largest in Lesotho and fourth in southern Africa covering an area of 19.8 hectares. It is also very close to the Letšeng and Liqhobong mines as it is within a 20 kilometre radius of the two mines.
Kao is located in the district of Mokhotlong about 200 kilometres north-east of Maseru the capital of Lesotho.
Former Letšeng Diamonds chief executive Keith Whitelock has been appointed to spearhead the Kao project. He headed Letšeng Diamonds for 14 years and spearheaded the construction, commissioning and operation of the mine during his tenure. Whitelock worked with De Beers, which operated Letšeng diamond mine for 21 years.
The mining industry has recovered from 2004 when the Letšeng Diamond company resumed operations at the mine.
Lesotho has become famous for producing some of the largest high quality diamonds in the world.
If recent large diamond recoveries are anything to go by, then the Kao mine is also set to produce large diamonds in the coming months.