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‘Increasing mining stake risky’

 

Bereng Mpaki

MINING Minister Lebohang Thotanyana says the government would continue to partner with the private sector in mineral prospecting due to the capital-intensive nature of exploration work.

Mr Thotanyana told the Sunday Express that government could not afford to increase its stake in the mining sector. The government currently holds a maximum of 30 percent stakes in various mining operations around the country, with the rest in the hands of private investors. The mining sector contributes under 10 percent of Lesotho’s gross national product.

“Increasing government’s stake in the mining sector would be risky because there is a lot of uncertainty in the exploration phase,” said Mr Thotanyana.

“This is because most of our kimberlite-bearing sites around the country have not been explored or prospected to ascertain the availability of mineral resources. That means we do not have enough information about the mineral resources available in the country.

“Therefore, investing in such uncertain circumstances would not be a wise decision for the government. For instance, prospecting operations at Mothae mine ended up costing over M380 million, yet they have since been abandoned. This shows how costly the industry is.”

The minister continued: “Because we rely on foreign investors to carry-out the exploration work, we basically negotiate on the unknown. That is the reason we end up owning a small portion of the mines.

“It is only when we have developed our economy that we can consider increasing our stake in the mining sector.”

Mr Thotanyana further said the ministry was exploring mineral resources other than diamonds to build a national database that would guide domestic and foreign investors.

“The Ministry of Mining is implementing the Lesotho Geochemical Mapping Project funded by the government of Lesotho. The focus of the project is the identification of 23 elements which include copper, nickel, zinc, uranium and lanthanum,” he said.

“The project involves soil and stream sediments sample collection and analysis at Council for Geoscience in Pretoria, South Africa and the production of map sheets.”

Mr Thotanyana also said the government was in the process of revoking nine mineral prospecting licenses after the holders failed to begin exploration work as expected.

He said the ministry assessed all the 19 mining companies holding prospecting licenses in the country to establish the progress they were making.

“The assessment was necessary because lack of progress was inhibiting job opportunities that would arise from the exploration of the mines,” Mr Thotanyana said.

“The study revealed that very little progress was being made. It was then presented to the new Mining Board which was appointed in January this year and has since recommended the cancelation of licenses for companies that are not prospecting.”

 

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