State ventures into mining

 

…establishes company to search for diamonds in Mokhotlong

Lekhetho Ntsukunyane

GOVERNMENT has registered the country’s first state-owned mining company that would recover any diamonds that might be where Polihali Dam would be constructed in Mokhotlong.

The firm, Polihali State Diamond Mining Company Proprietary Limited, was registered in November 2014 and would engage in alluvial excavation only.

Mining minister Tlali Khasu, the ministry’s Principal Secretary (PS) ’Maphutheho Ranooe, Finance PS Khosi Letsie, Law and Constitutional Affairs PS Tebello Thabane and former Tourism and Environment PS Samuel Rapapa, are listed as directors of the company due to their positions in government.

However, Mr Rapapa, yesterday told the Lesotho Times he was no longer part of the set-up following his resignation from the ministry last month.

Confirming the developments to the Lesotho Times yesterday, Mr Khasu said: “A cabinet decision was reached sometime in 2013 for the establishment of a state-owned mining company. Polihali State Diamond Mining Company was then registered last year, for the sole purpose of alluvial diamond-search in Polihali before dam-construction begins.

“Government decided to establish this this firm to avoid problems that always come with foreign companies or even local ones getting such tenders. For instance, the government is paying thousands of maloti to people who went to court to complain that they had mining rights in some areas where such operations were taking place.”

According to Mr Khasu, the company would be dissolved as construction of Polihali Dam, which starts in 2017, nears completion.

Meanwhile, the company’s formation comes at a time the Policy Analysis and Research Institute of Lesotho (Paril) has recommended the establishment of such a firm wholly owned by government “for Lesotho to maximise returns from mining operations.”

Paril – a non-governmental organization (NGO) conducting research studies on national policies among other functions – last year worked in partnership with Southern African Resource Watch (SARW) to produce a report on the ownership of mineral rights in Lesotho.

In the report, Paril recommended that government should find ways to manage its equity “in order to enable proper coordination and reporting by people representing it in mining companies’ boards.”

The report added: “There is need for government to establish a state-owned mining company, which would take control of all equity held by government in mining operations. The company will reinvest dividends into developing its capacity in order for Lesotho to maximise returns from these mining operations. The reinvestment will not only be limited to investing in Lesotho but could buy shares in mining giants such as Gem Diamonds and others.

 

“This will also ensure the country is able to train and retain skilled personnel for further mineral development. However, this requires a very high level of professionalism on the side of those who will be entrusted to run the state-owned company. It would also mean that the country should be ready to forego some of the revenue from the sector in the short-term in order to be able to enjoy the long-term benefits.”

 

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