Mathatisi Sebusi

AS the mining sector’s woes continue to mount, Storm Mountain Diamonds (SMD), which operates Kao Mine, has announced plans to retrench workers following a decision by its board to place the mine under care and maintenance to avert debilitating financial losses.

The deteriorating international diamond market has significantly impacted the Butha Buthe situated mine, leading to the decision to lay off staff.

SMD is jointly owned by Namakwa Diamonds Limited, which commands a majority share of 70 percent, with the Lesotho government owning the remaining 30.

In a letter dated 19 September 2024, SMD informed its employees of its board’s decision to put the mine under care and maintenance, at a date yet to be determined, citing  financial difficulties caused by the low prices of diamonds on the international market. As a result, retrenchments had become inevitable.

“We are also looking at other ways to resolve this matter instead of retrenching workers in high numbers. We will continue looking for other alternatives meant to save the company some money,” the company said in a statement.

In an earlier interview with the Lesotho Times, SMD Chief Executive Officer, Neo Hoala, explained that the global diamond market had been in decline for some time, putting immense pressure on mining companies. She attributed the challenges to a significant drop in demand from their Asian clients.

“The crisis is not unique to Storm Mountain Diamonds. The entire mining sector in Lesotho is facing similar challenges. It is no secret that we are losing money, and continuing production as usual under these circumstances would only result in greater losses.”

Minister of Natural Resources, Mohlomi Moleko, had also confirmed the widespread impact of the market downturn on the mining industry. He said several mines across the country were facing similar financial difficulties and had opted to go into care and maintenance to avoid further losses.