See also:
» 12.02.2010 - Lesotho to focus budget on alternative revenue creation
» 05.10.2009 - Lesotho signs $25 million agreement with WB
» 23.09.2009 - Lesotho will be hard-hit by declining SACU revenues
» 30.07.2009 - Forum discusses role of infrastructure to health care
» 16.07.2009 - Lesotho govt not backing off new financial tool
» 08.04.2009 - Lesotho ready to roll out social cash grants
» 01.04.2009 - Lesotho's public accounts still a shame
» 18.02.2009 - Lesotho to tighten spending to cushion against recession

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Economy - Development

Lesotho hopes for diamond mining investments

afrol News, 11 February - The potential viability of Lesotho's Liqhobong diamond mine, currently under construction, "has sparked the interest of European investors," according to the government. Also the Letseng diamond mine, opened in November last year, is showing remarkable results.

The government of Lesotho today noted that foreign investors were "impressed by the viability" of the Liqhobong mine in the Kingdom's Maluti Mountains. Most of these investors are already involved in the project.

The investors referred to were from "leading companies involved in the construction of the mine," including European Diamond, the parent company of the Liqhobong Mining Development Company, and the Dragon Group, based in London. Share prices in these companies had jumped last month due to positive perspectives for the operations in Lesotho.

Impressed by the "highly conducive" climate and geology of the region, Dragon Group representative, Jim Williams was quoted saying he believed there would be a return of investment from the mine in 18 months' time. Chief Executive Officer of the Liqhobong mine, Roy Spencer said Lesotho was "widely known for its rich diamonds yet the stone has been ignored for a long time."

The mine operators hope they will start selling some of its diamonds on the world market by June this year. The company intends drawing its labour force from the surrounding villages. It presently employs a complement of 55 people although this is expected to grow to 75 soon, according to the Basotho government.

The chief mining engineer of the Ministry of Natural Resources, Mpooa Mpooa, said much of the work at the mine was expected to be labour intensive, including diamond sorting by hand, to provide employment for the local people.

Lesotho has a 26 percent share capital and expects to get eight percent in royalties, Mr Mpooa said, adding that the life expectancy of the mine was an estimated 15 years.

Diamonds were first discovered in the impoverished mountain kingdom in 1957 and a modest mining industry was established in the 1960s. During the 1960s and 1970s, several large gems were found in Lesotho's mines and the industry employed thousands of people.

Mining activities in Lesotho's Maluti Mountains however ceased in the 1980s due to low world market prices for diamonds and royalty disagreements between the Maseru government and mining companies. Only last year, diamond mining activities have resumed in the kingdom.

While the Liqhobong mine is still in its exploration phase, diamond production started up in the Letseng mine in November last year. Letseng - which is owned by the government of Lesotho and the South African conglomerate JCI - produced four enormous flawless diamonds in January. Only these gems were estimated at a value of US$ 6 million.

Meanwhile, prospecting is currently on at another mining site, at Kao in Botha-Bothe, undertaken by a Canadian company, Serious View Trading. The Basotho government hopes that further explorations and investments will be the result of the current high world market prices.

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