THE Mining ministry will soon revoke its mining contracts with the proprietors of Lemphane and Kolo diamond mines.
Revoking the contracts will open up space for new investors to enable the mines, which have been dormant for several years, to resume operations this year, Mining Minister, Serialong Qoo, said in an interview this week.
Lemphane mine has been dormant since 2014 while Kolo mine last operated in 2018 after completing its trial mining phase.
Lemphane mine was leased to the United Kingdom’s Paragon Diamonds Limited in 2014 but has to date failed to start production due to funding challenges. The company needed to raise at least US$100 million before commencing operations, according to its licence agreement.
Kolo mine on the other hand, was leased to Reskol Diamond Mining in 2011. The company announced back in 2018 that it had completed trial mining and was preparing to move into commercial production pending relocation of families who were settled in the leased mining area. No progress has been made to date.
Mr Qoo expressed concern over the lack of progress by the two mines, saying it was holding back the country’s job creation efforts.
“We are concerned by their lack of progress, and we will revoke their contracts in 2022 to open them up for other investors willing to take them,” Mr Qoo said.
“Our primary concern is job creation, and with the time these mines have taken, it does not look like we are getting anywhere. For instance, Lemphane mine was awarded a licence over five years ago but they are yet to start production. We want to resolve all outstanding issues around our mining operations for the sake of our people who need jobs.”
The ministry is also targeting to start issuing artisanal small-scale mining licences this year following the passing of the Mines and Minerals (Amendment) Bill by the National Assembly last November. The Bill, which seeks to alleviate poverty by empowering locals to venture into mining, is awaiting clearance by the upper house of parliament, the Senate before His Majesty King Letsie III can approve it into law.
The Bill was preceded by the passage of the Precious Stones (Prevention of Illicit and Theft of Diamonds) Regulations in November 2020.
The regulations gave limited amnesty to persons in possession of undocumented diamonds to hand them over to the government for auction on their behalf, culminating in a diamond auction in May 2021.
“Implementation of the Mines and Minerals (Amendment) Bill after being passed by the Senate is actually our starting point for 2022. We had anticipated the Bill would be passed before the end of 2021 so that we would have already begun issuing diamond digging permits by now. We are just waiting for the Senate to give us the green light.”
The minister said they had made progress in November 2021 towards localising the sale of diamonds by issuing an expression of interest (EOI) for interested entities to conduct a feasibility study. The deadline for the applications was 21 December 2021. Lesotho diamonds are currently exported in their rough form thereby denying the country an opportunity to create diamond processing jobs.
“The idea is to explore how best the processing of Lesotho diamonds can be done locally and to study the viability options for beneficiation. This is part of creating local value chains for employment creation through different processes including diamond cutting, polishing in the country,” Mr Qoo said.