Mine reopening will boost govt’s finances: Mokhothu
DEPUTY Prime Minister Mathibeli Mokhothu has welcomed the resumption of operations at Liqhobong Diamond Mine, saying this will boost government revenues.
In addition to boosting government earnings through tax and dividends, the mine would also provide much needed employment opportunities for Basotho, Mr Mokhothu said.
He said this while officiating at the re-opening ceremony at the mining site in the Butha-Buthe highlands over the weekend.
Liqhobong mine is 75 percent owned by London Stock Exchange-listed Firestone Diamonds while the remaining 25 percent is owned by the government.
The re-opening of the mine comes a year and four months since it suspended operations in April 2020 due to the Covid-19 induced slowdown on global economic activities.
The majority of the mine’s 600 strong work force was laid off, leaving only 50 staffers to take care of maintenance operations at the production plant.
Some of the dignitaries who attended the re-opening ceremony alongside Mr Mokhothu were ministers, Serialong Qoo (Mining), Lebohang Monaheng (Public Works) ‘Mamookho Phiri (Education and Training), Likeleli Tampane (Gender, Youth, Sports and Recreation), Butha-Buthe district administrator Tšepa Chaba and Motete constituency legislator Tumahole Lerafa.
Mr Mokhothu said he was happy that the resumption of mining operations would contribute revenue to the country’s coffers while generating employment for Basotho.
“I am happy to officiate at the re-opening of Liqhobong Mine on behalf of the government,” Mr Mokhothu said.
“The resumption of mining operations is important to the government for a number of reasons, but most importantly, it will help generate tax revenues.
“We all bear witness to the fact that the government is in a financial fix of a shrinking revenue pool due to the Covid-19 pandemic. Therefore, the resumption of operations will increase the government’s revenue collection which will in turn enable the state to provide services to the people.
“This also means that jobs will be created and many people will be employed at the mine. I am reliably informed the mine will employ at least 300 unskilled workers. This is a significant contribution given the high unemployment rate in the country,” Mr Mokhothu added.
Mr Qoo said the mine would increase government revenue by paying ground rent, royalties and dividends.
He said he was happy that his ministry had facilitated the resumption of operations which would also create jobs for the people.
On his part, the mine’s general manager, Paul Bosma, said they were happy to be back in business. He however, bemoaned the fact that the mine had not yielded higher value diamonds as initially expected.
“One thing which was a surprise to us was the actual value of the diamonds that we have been recovering here at Liqhobong Mine. The assumption had been that the value would be above US$100 per carat but we are averaging US$75 per carat.
“That put us under a lot of pressure because we had a debt to repay. Things got worse last year when the Covid-19 pandemic broke out all over the world as we had to put the mine on care and maintenance.
“During the care and maintenance period, we had to check the market to determine if the pricing of our product had improved. We also used the period to restructure our debt. The good news is that we are now at a point where we feel can resume operations,” Mr Bosma said.
He said they have already contacted their former employees to come back to work.
“We also reached out to all our employees to find out how many were available and willing to come back to work. The good news is that most of them are available and willing to come back. We are happy about that.
“As we ramp up production, we will also recruit more people. We hope to be at full production by the first quarter of next year. We are currently making the mine pit ready for production,” Mr Bosma added.