Allowing small-scale diamond mining will empower locals-Tjatja
THE Ministry of Mining is pushing for the licensing of small-scale diamond miners which it says will help in boosting the economy. Small scale mining was banned in 1968 after worries about the safety of miners among other issues. Commissioner of Mines, Pheello Tjatja says the small-scale diamond mining sector has the capacity of boosting Lesotho’s economy while also creating employment. Mr Tjatja sat down with Lesotho Times reporter Bereng Mpaki about the government’s plans on small-scale mining. Among other things, he said allowing small-scale miners to operate would give locals a chance to partake in the sector which has largely been dominated by foreign companies because lack of financial capacity on the part of locals to venture into mining.
LT: What has inspired the efforts to allow small-scale diamond mining?
Tjatja: Lesotho has not allowed artisanal and small-scale mining (ASM) for many years and we have realised that we have a lot of places around the country with kimberlite deposits that are lying idle.
The phenomenon referred to as the paradox of mining in Africa is that Africa is mineral rich but its people are living in the poorest of conditions. In the case of Lesotho, our paradox of mining is that we have the highest density of kimberlite deposits in the world but we only have four operating mines.
We have over 400 kimberlite bodies and this means very little has been done to tap into their economic potential. This is what we want to solve with the re-introduction of artisanal and small scale mining.
But small-scale mining is not new in Lesotho because diamond digging by licensed Basotho diggers was first introduced in 1961 at Letšeng-la-Terai. This later extended to Hololo, Kao and Liqhobong which were worked by Basutoland Diamonds Ltd until 1967.
Later in 1968, the government resolved to give exclusive prospecting and mining rights to the Lesotho National Development Corporation (LNDC) so that any company willing to enter into mining could do so by entering into an agreement with the LNDC. However, in 2004 the government decided to stop issuing of licences for small scale mining bringing to a stop all diamond digging activities by small-scale miners.
There has also been a public outcry about exclusion of Basotho in diamond mining activities with special reference to small-scale mining as most Basotho do not have the capital required to go into large-scale mining. As a result, the ministry has resolved to develop small infrastructure to advance Basotho miners who are willing to participate with a view to grow them into large-scale miners in the future.
LT: What are the direct benefits of small-scale mining?
Tjatja: Our records for diamond digging output by licensed Basotho diggers from 1961 to 1968 when digging ceased stood at 162 070 carats valued at M3 180 010 at Letšeng-la-Terai only. This translates to an inflation adjusted figure of over M300 million in today’s currency. This shows that the ASM sub-sector has a huge potential and could be an invaluable provider of employment for both skilled and unskilled labour.
The initiative could also serve as a building block towards establishing a local diamond trading platform as well as diamond cutting and polishing activities that could affect many other sectors in the value chain.
The government already has a mandate through the Minerals and Mining Policy to transform the ASM sub-sector into a value-adding, poverty reducing economic activity with special significance for rural development and ensuring that the sector is part of integrated rural development plans.
The project also aligns with the second National Strategic Development Plan 2018/19 to 2022/23 (NSDP II) since a well-managed and well-resourced diamond digging initiative can contribute to job creation and increasing disposable income thereby stimulating economic growth especially of the disenfranchised rural masses.
LT: What kind of groundwork needs to be put in place to facilite re- introduction of small scale mining?
Tjatja: The strategy we intend to use for this project is as described in the Mines and Minerals Policy of 2015. We must create an enabling legal framework because ASM is currently not catered for in our laws.
We must limit ASM activities to Basotho nationals only to increase the participation of Basotho in the diamond industry. We will also capacitate the prospective miners with plant machinery, skills and finance to undertake the mining.
Implementing the project will be a collaborative effort that shall need support from different arms of government. While the Ministry of Mining shall assume the leading role, it will be essential for interventions from the Ministry of Local Government and Chieftainship through coordination with the local authorities, Ministry of Tourism, Environment and Culture, Ministry of Water, the Ministry of Trade and Industry, the Ministry of Small Businesses and Cooperatives and Marketing and the national security agencies. Close cooperation will be crucial in seeking the economic emancipation of Basotho through its most valuable natural resource.
LT: How are you going to ensure that ASM players comply with legal requirements when large mining companies are struggling to adhere to legal requirements related to the environment?
Tjatja: For the successful implementation of ASM, the project’s activities will focus among other things, on identifying and demarcating pilot sites for digging.
After that we will assess these sites for the social and physical environmental impacts and the mitigation strategies. This means ASM will still need an environmental impact assessment (EIA) clearance for protection of the surroundings before commencing operations.
For each site identified, there must to be preliminary earth works in preparation for diggings. This will include access roads construction, removal of overburden and the construction of slime and fresh water dams in collaboration with community councils.
The fact that we are engaging the local government authority says we are starting to decentralise part of our activities for them to accept ASM as part and parcel of it.
Once the diggers have been licensed, the department of mines intends to build a small office and house on each digging area. The office will be used by licensed diamond dealers and will contain a strong room for keeping diamonds and cash in their custody.
The ministry also intends to assist the diggers by purchasing simple hand-operated concentrating equipment for resale to the diggers on hire purchase terms or leased for a share of sales or upon payment of a certain fee. Efforts will also be made to improve sanitation and the water supply.
When diamonds have been recovered and sold, a small percentage will go towards the government to establish a revolving fund. The fund will be used to gradually pay back the cost government incurred in buying machinery for the diggers. The fund will also be used to convert the individual diggers into larger mining operations. We will have engineers stationed on site to guide them all the way because the ultimate goal is to have ASM graduating into large-scale miners.
LT: What role does diamond amnesty play in the ASM project and how much progress has been made on it to date?
Tjatja: By introducing ASM, we are running the risk of false declaration of diamonds where a digger can claim to have recovered a diamond from his site whereas it may come from elsewhere. If that happens, it would mess up the whole ASM project as it would lead to recording of incorrect information on the performance of mining sites.
So, to counter this, the ministry decided to get rid of all diamonds currently floating in the market. We are not sure where they come from but they claim they were recovered in the past when small scale mining was still allowed but were unable to declare them as a result of the abrupt manner in which ASM was stopped.
We want all the diamonds currently floating in the market to be cleared before the ASM starts facilitating truthful declaration of their findings on site. We have to ensure that the dealers’ financial benefit from sale of the diamonds is better than what they can get from the black market. Diamond amnesty will be done within a short time and then closed.
LT: What will happen to the collected diamonds after the amnesty?
Tjatja: The government is going to sell the diamonds on behalf of dealers but we will deduct a small royalty percentage. We are currently developing a proposal to determine the percentage. We have proposed two ways in which the diamonds can be disposed of. We can either issue diamond dealers’ licences or task them to sell the diamonds. Alternatively, we can sell them the same way diamonds from the existing mines are sold.
Clearing floating diamonds in the market also help us to understand diamond smuggling in the country. If we continue confiscating diamonds after the amnesty, we will know whether these diamonds are being stolen from the mines or indeed are from the previous ASM activities. Right now we are not sure where these floating diamonds come from. That is still a grey area.