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Diamond sector set for major boost


Kao mine pitBereng Mpaki

LESOTHO is on the cusp of dramatically upscaling its diamond production with the commencing of operations at Liqhobong Mine and the recent expansion of Kao Mine.

Formally known as Liqhobong Mining Diamond Company, Liqhobong Mine is partly owned by United Kingdom-based Firestone Diamonds with 75 percent shareholding and the government of Lesotho with the remainder of the shares.

Liqhobong Mine is not only the largest investment in Lesotho’s mining industry at M2.1 billion, but also has the largest production capacity of one million carats per annum for at least 15 years of its mining lease agreement.

At that level, Liqhobong will more than double the current productivity in the diamond mining industry. At the moment, Letšeng Diamond mine is estimated to produce around 100 000 carats per annum, while Kao Mine, produces around 260 000 carats per annum.

Overall, Liqhobong Mine’s production, which is expected to commence by the fourth quarter of 2016, is estimated to increase Lesotho’s annual diamond production by four times.

Firestone Chief Executive Officer Stuart Brown says construction of the mine plant was 95 percent complete ahead of the production launch.

Mr Brown was speaking during a tour of the mine site by Deputy Prime Minister Mothetjoa Metsing, who headed a government delegation made up of six leaders of the seven-party coalition government as well as other senior government officials.

The other senior officials were Mining Minister Lebohang Thotanyana, Minister in the Prime Minister’s office Kimetso Mathaba, Minister of Home Affairs Lekhetho Rakuoane, Tourism Environment and Culture Minister Likeleli Tampane, Small Business Development, Cooperatives and Marketing Minister Thabiso Litšiba, and Deputy Minister of Public Works and Transport Mokhele Moletsane.

Principal Secretary in the Ministry of Mining ‘Makhojane Monyane, Commissioner of Mines Tšeliso Ntabe as well as Labour Commissioner ‘Mamohale Matsoso were also part of the delegation that also toured Kao Mine on the same day.

“Over the past 24 months, we have been hard at work despite the challenging weather conditions. We have spent M2.1 billion to build the mine infrastructure from scratch. Everything you see here is brand new. From the staff accommodation facilities to the state-of-the-art plant equipment; all new,” Mr Brown said.

“We have had the luxury of designing everything from scratch and bringing in the best technology. We had the space and time to recruit a team of engineers who built the mine.”

He said the project was on course, with construction 95 percent complete.

“We are on budget and very close to finishing. We are about 95 percent complete with the building of the physical infrastructure, and then we will be in the process of commissioning the mine throughout all of September this year,” said Mr Brown.

“We have about 120 people employed so far, and we will have a staff compliment of around 300 people when we go commercial, with about 21 expatriates.”

Commenting on the developments during the tour, Mr Metsing lauded Liqhobong Mine for staying both within the set budget and time. He said they were feats many global mining firms would be proud of. The project remains within its $185.4 million budget.

The deputy premier said the commencement of operations at the mine would change the narrative about Lesotho. He said the world would focus on the beautiful stones Lesotho mines produced and the best practice operations of its mining industry.

“This mine will have a tremendous impact in improving the image of Lesotho in the eyes of global observers, since the country is sometimes reported on negatively,” Mr Metsing said.

“Lesotho is a future reference point for others globally because of mines like Liqhobong.”

He said the government was committed towards continuing to create an enabling environment for the mining sector for the benefit of the people. Mr Metsing also commended Liqhobong for its interest in incorporating beneficiation of diamonds in the country, saying it would enhance job creation.

For his part, Mr Thotanyana said Liqhobong was on course to become one of the biggest producers of yellow stone diamonds in the world.

He said the mine’s mega production capacity of one million carats per annum would not only boost Lesotho’s economic growth but would also improve its global diamond production rankings from position nine to seven.

The delegation then made the 30-minute drive to Kao Mine which is also known as Storm Mountain Diamonds

Having recently completed an expansion project on its plant infrastructure and increasing the scope of mining in the mining pit, the Kao Mine has been given a new lease of life.

The expansion has increased the lifespan of the mine by at least 20 years while the upgrading of the plant equipment significantly increased its processing capacity.

According to Kao Mine officials, the upgrading also helps to reduce the damage to larger diamonds during the processing of the ore.

The officials also explained that in order to reach the high grade kimberlite ore, known as K6, they have had to temporarily close down the mining pit and then mine around the area to widen the pit in order to expose the K6.

They said the K6 was left at the bottom of the mining pit by previous mining operations before they took over.

Kao Mine is believed to have one of the richest grades of kimberlite in the country.

They also indicated that while the initial focus was on mining the K6, they soon realised there were lower grade dykes diverging from the K6 which could still be mined profitably although at higher volumes.

While the mine was currently employing 587 people on a permanent basis, the expansion project would see the figure rising to 630, excluding casual workers.

Commenting on the visit of the delegation, one of the directors of Kao Mine Motšelisi Mokhethi said it was important for the government, as one of the shareholders, to witness firsthand the developments on their investment.

The government holds a 25 percent stake, while Namakwa Diamonds holds a 75 percent in the mine.

“It is encouraging for us that when we have achieved a certain milestone, the government at the highest levels comes to visit us giving their support,” Ms Mokhethi said.

“This visit will also give them an idea of how we are adding value to their stake at Kao Mine, while also ensuring they regulate our operations.”

In his remarks, Mr Metsing commended Kao Mine management for their “responsible mining” which helped to prolong the lifespan of the mine by 20 years.

“The expansion project of this mine has extended the lifespan of the mine by 20 years. This is what is called responsible mining; which is effectively going to extend the prosperity of our country through employment and also good lessons we have learned going forward,” Metsing said.

Unlike in many African countries, where mineral resources like diamonds are a source of conflict, he said mineral resources in Lesotho were instead being mined to advance the socio-economic development of the people.

“We regard Kao Mine as one of the pioneers of that here in Lesotho. Your good image shines on us as a country. We want you to carry on with the good work.”

For his part, Mr Thotanyana said the mine played a pivotal role in contributing to the country’s economic development.

He said 10 years ago, the mining sector only contributed about 0.7 percent to Lesotho’s gross domestic product (GDP) before the operation of Kao and Letšeng mines.

“Today the sector contributes close to 10 percent of Lesotho’s GDP mostly influenced by the operation of the two diamond mines,” Mr Thotanyana said.

He said the mining sector was doing well despite a number of challenges that still needed to be addressed. Some of the well-documented challenges include:

  • Existing legislation which does not respond to the policy aspirations;
  • Inappropriate institutional structures;
  • The diamond sub-sector which is not properly streamlined;
  • Lack of required tools to undertake necessary research and for information management of the minerals resources.

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