Govt, Mothae talks nearing completion – Qoo
TALKS are at an advanced stage between the government and the management of Mothae Diamond Mine for the company to resume operations soon, Mining minister Serialong Qoo has said.
Mothae mine is owned by Lucapa Diamonds with 70 percent shares while the government holds the remaining 30 percent free carry shares. The mine commenced operations in January 2019.
The mine has remained in care and maintenance since June 2020 after the management proposed to the government that the majority shareholder, Lucapa Diamonds should be given exclusive rights to buy all the mine’s production for five years to avoid potential losses due to the slump in global diamond prices on the back of the Covid-19.
The government at the time said it needed time to peruse through the proposal as it was the first of its nature.
“Mothae made a-mine-refinancing proposal that was coupled with method of sales of diamonds, and their request is as follows: To sell all its diamonds directly to Lucapa Diamond mining (the parent company) for five years without any tendering or auction process,” Mr Qoo said in July this year.
“The ministry noted that this is a unique and sensitive request which needs to be investigated and discussed thoroughly between the two parties.”
He said it was important for the government to look out for the country and its people’s interests in the negotiations of the mine’s new sales and marketing proposal.
The minister this week told the Sunday Express that he was happy with the direction that the talks were taking and said an announcement would soon be made once an agreement is reached.
“Talks between the government and the management of Mothae mine are at an advanced stage and we are hoping they will be concluded soon so that the mine can resume operations.
“I am content with the direction that the talks have taken so far… The government’s task is to ensure that whatever agreement is reached will benefit the country and its people.”
Part of the mine’s proposal was deferment of royalties from April 2020 to March 2021, which the government approved.
The government however, did not agree to the mine’s proposal of deferring payment of surface rent for 2020 to 2021.
Meanwhile, a total of 3 962 carats of Mothae diamonds were sold into a cutting and polishing partnership during the quarter ending 30 June 2020 for gross sale proceeds of US$2.0 million. This represented an average price of US$505 per carat.
Total sales for the year to date totalled 10 268 carats for US$4.1 million or US$402 per carat. The mine held a diamond inventory of 784 carats at the end of the quarter.