THE government has passed a new law legalising diamond artisanal and small scale mining (ASM).
This after Mining minister, Serialong Qoo, last weekend announced the enactment of the Mines and Minerals (Amendment) Act, 2021 which is meant to support ASM throughout the country.
The government banned ASM in 2005 due to its informal and disorganised nature, which often led to injuries of diggers, among other challenges.
The legislation was passed by the National Assembly in November 2021 and had been held up by the Senate, which wanted the Mining ministry to include a provision which specifies that the law was meant for indigenous Basotho only, before its eventual enactment this month.
Mr Qoo said the new law sought to alleviate poverty by empowering locals to venture into mining and increase their participation and benefit in an industry dominated by foreign players.
All four of the country’s large operational diamond mines are majority owned by international investors while the government holds a minority stake. Letšeng diamond mine is 70 percent owned by the London Stock Exchange-listed Gem Diamonds; Kao diamond mine is 75 percent owned by Storm Mountain Diamonds while Liqhobong diamond mine is 75 percent owned by the London Stock Exchange-listed Firestone Diamonds. Mothae diamond mine is 75 percent owned by the Australian Stock Market- listed Lucapa Diamond Company Limited.
Mr Qoo said the government was trying to ensure that Basotho can make a living from the diamond mining sector.
“Today we announce that the law for small scale and artisanal mining is finally published,” Mr Qoo said.
“This means that Basotho can now venture into diamond digging. People thought this idea would never come to reality, but today ordinary people will be able to participate in the diamond sector.”
He explained that under the new law, ASM permits would only be issued to individuals unlike the large diamond mines licences which are given to large companies.
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Mr Qoo said that the government would allocate small plots of land to small scale miners and thereafter allow them to trade their diamonds through a local open auction.
The office of the Commissioner of Mines will be responsible for issuing the permits.
Mr Qoo warned the miners to be orderly and avoid turning their operations into violent enterprises, like the ‘zama zamas’ who are engaged in illegal mining from abandoned mines in South Africa.
Due to high unemployment in the country, scores of young Basotho men migrate to the neighbouring country to work in dangerous mines where there are exposed to gang fights that often result in loss of lives.
“We can anticipate illegal miners from South Africa to come back home, but we hope they will not come back with the ‘zama zama’ mentality. This is different because we are legally opening up for small scale diggers.
“We are not expecting illegal digging, the killings, trading of diamonds for guns but we want transparent legal operations which will support the livelihoods of Basotho,” he said.
The permits will be issued in collaboration with local authorities such as community councils and chiefs to ensure that only citizens can access the mining plots, Mr Qoo said.
On his part, Commissioner of Mines Pheello Tjatja said: “The constitution does not allow the country’s mineral resources to be mined by foreign nationals”.
“The ASM licences are given to individuals and not companies and such persons should be Lesotho citizens.”
Responding to the passing of the new law, a prominent diamond dealer, Mabusetsa Mabohla, welcomed the development saying it was positive.
He however questioned the wisdom behind allowing only individuals to access the permits as they may not have the requisite technical and financial capacity to mine.
“This is obviously a welcome development which will allow locals to venture into diamond digging. But I am concerned as to whether individuals will have the capacity to mine as required given that diamond mining is technical and needs certain types of skills,” Mr Mabohla said.
The development of the Act was preceded by clearing off of illegal diamonds in the market through passing of the Precious Stones (Prevention of Illicit and Theft of Diamonds) Regulations 2020 by the National Assembly.
The regulations gave limited amnesty to persons in possession of undocumented diamonds to hand them over to the government to sell on their behalf, culminating in a diamond auction in May 2021.
The 30 May 2021 auction fetched a M378 650, 52 against a target of M372 200, 95. This was made up of M54 864, 55 from surrendered diamonds that weighed in at 18, 34 carats; and M327 785. 55 from confiscated diamonds that weighed in at 209, 57 carats.
Finance Minister, Thabo Sophonea, in his 2020/21 mid-term budget review statement revealed that the government had identified 10 mining sites suitable for ASM.
“A study focusing on the feasibility of ASM on localisation of diamond trading was undertaken and completed. I am proud to report that 10 ASM sites have been identified and nine of them are found to have potential.
“Therefore, it is important to ensure compliance with international best practices for sustainable growth and to protect mineral resource wealth for the future generations as well,” Mr Sophonea said in November 2021.