Home NewsLocal News Govt receives US$4 million dividend from Letšeng

Govt receives US$4 million dividend from Letšeng

by Lesotho Times

. . . 28461 carats sold for US$52, 1 million as mine registers strong first quarter performance for 2022

Staff Reporters

BUSINESS is booming at Letšeng Mine in Mokhotlong. This amid revelations that the mine paid the government a US$4 million dividend for the first quarter of the year.

All in all, the mine paid out a dividend of US$13, 4 million for the first quarter, with US$8, 9 million of that amount going to the majority shareholder, Gem Diamonds.

The United Kingdom-based Gem Diamonds holds 70 percent of the shares at the Letšeng Mine while the remaining 30 percent shareholding is held by the Lesotho government.

Letšeng Mine is said to be the highest dollar per carat kimberlite diamond mine in the world. In keeping with its reputation for high value output, the latest trading update released by Gem Diamonds for the period 1 January 2022 to 31 March 2022 shows that 28461 carats of diamonds were sold at an average price of US$1831 per carat. The number of carats sold this year reflects a 6 percent increase on the 26961 carats that were sold in the first quarter of 2021. The 2022 first quarter average price per carat is 12 percent higher than the 2021 first quarter price of US$1630 per carat.

These impressive sales enabled Letšeng to rake in US$52, 1 million from the sale of the rough diamonds – a 19 percent increase from the US$43, 9 million achieved from sales for the first quarter of 2021.

The 28 461 carats sold during the first quarter of 2022 also compare favourably with the 24 790 carats sold in the fourth quarter of 2021 (October to December 2021) at US$50 million.

“During the period (first quarter of 2022), Letšeng paid a dividend of US$13, 4 million,” Gem Diamonds states in the trading update.

“This resulted in a net cash flow of US$8, 9 million to Gem Diamonds and a cash outflow from the Group of US$0, 5 million relating to withholding taxes and US$4 million in respect of the Government of Lesotho’s share of the dividend.

“The highest price achieved in the period was US$66 059 per carat for an 8, 41 carat pink diamond. The highest price achieved during the period for a white diamond was US$53 834 per carat for a Type IIa white diamond. Nine diamonds sold for more than US$1 million each, generating revenue of US$16, 2 million during the period.

Even the working environment was conducive as Gem Diamonds reported “no significant incidents” during the first quarter of 2022. The company said almost all its employees have been vaccinated against the Covid-19 virus.

“No major or significant community or environmental incidents occurred across the Group during the period. In order to ensure the continuation of safe and responsible operations, and notwithstanding a vaccination status of 99, 9 percent at Letšeng, we continue to be vigilant and remain focused on maintaining all requisite and appropriate procedures and protocols implemented in response to the Covid-19 pandemic,” the company said. Letšeng’s strong first quarter performance is a clear indication that the mine is on an upward trajectory and recovering from the ravages of the Covid-19 pandemic which ravaged the business sector in the past two years.

Between 2020 and 2021, all mining operations were halted when the government imposed a hard lockdown as part of efforts to fight the deadly pandemic.

Operations eventually resumed early last year at the various mines after the government-driven mass vaccination campaign and other protocols implemented to fight the pandemic had begun to bear fruit.

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