Letseng set to meet target

MASERU — Letseng Diamonds chief executive officer, `Manthethe Maharasoa, says the mine is on course to meet its annual target of recovering 100 000 carats of diamonds this year.

Maharasoa told the Lesotho Times last Friday that Letseng had already recovered 20 000 carats of diamonds in the second quarter of this year.

She said they were confident that the mine would meet its annual target of recovering 100 000 carats of diamonds.

“We are on schedule and we believe that we will be able to recover about 100 000 carats for this year which is our annual production target,” Maharasoa said.

Letseng Diamonds is famous for unearthing high quality diamonds with the mine recovering some of the biggest pieces since production began in 2004.

“We produce large diamonds of high quality.

“We are still in the position where 90 percent of our revenue comes from about 10 percent of the stones we recover at the mine,” Maharasoa said.

Maharasoa said she was confident that prices of diamonds will continue to firm in the aftermath of the world financial crisis.

“We are sitting at around $1 700 per carat indicating that prices have recovered and are now shifting towards pre-crisis levels,” she said.

However, Maharasoa said she was not anticipating a significant shift in the prices of rough diamonds for the remainder of the year.

She also expected a slight depreciation of the rand.

She said the ideal exchange rate would be at around M8 to the US dollar which would “be good for business”.

According to a first-half report released on Monday by Gem Diamonds which holds a majority stake in Letseng, a strike by employees of one of the contractors earlier this year had seriously affected production at the mine.

Maharasoa however said demand for rough diamonds had remained strong this year with the trend continuing through the second quarter as the global economy recovered from the financial crisis.

“America is still the world’s largest market for global production as it absorbs 40 percent of the world diamond production,” she said.

However, China and India have also been strong buyers in the diamond market and this was positive for diamond production in Lesotho, she said.

She said cost management was a key element at the mine and the mine was focusing more on efficient methods of production to reduce costs.

“The outlook is positive with slow growth. As a business we want to be aggressive in terms of managing costs,” Maharasoa said.

Letseng Diamonds employs over 1 000 people and generates revenue of over US$100 million in sales with “about 60 percent of the revenue remaining in the country through royalties, taxes and other charges”.

She added that the local diamond mining industry was experiencing tremendous growth.

She said Lesotho needed to come up with a national strategy that was proactive to accommodate that growth.

Letseng is the only mine in full-scale production while a number of mines are in the prospecting and trail production phases.

“There is going to be demand for skills as the industry develops and its contribution to the economy will significantly increase as currently it contributes seven percent of GDP,” Maharasoa said.

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