MASERU — Cabinet is discussing the possibilities of acquiring majority stakes in mining companies.
Prime Minister Thomas Thabane yesterday told the Lesotho Times that the cabinet started the discussion after “scores of people approached the government with suggestions that the state should have majority shares in the mines”.
Thabane however said it is still early for the government to come up with any decision on the issue.
“We are still discussing how to approach this difficult issue,” Thabane said.
“It has to be clear that it is not our own initiative to go for controlling shares in the mines but the people approached us with the issue and we are seriously talking about the proper approach to it, if it will be possible at all,” he said.
“This is a sensitive issue that needs to be handled with care.”
Thabane however dismissed as false media reports that the government is planning to make wholesale changes to the ownership structure of foreign businesses in Lesotho.
Last week, Business Day, a South African daily business paper, said Lesotho was considering an indigenisation programme akin to the one in Zimbabwe.
The paper said the policy could compel foreign investors to sell 51 percent of their businesses to Basotho.
The report triggered panic among foreign-owned businesses.
Thabane said the report was “false and baseless”.
Acting government secretary, Motlatsi Ramafole, said cabinet has assigned Mining Minister, Tlali Khasu, to visit Botswana to study how it implemented its shareholding policy in mines.
“I can confirm that the issue is under discussion in the cabinet and that the Honourable Minister of Mining has been assigned to go to Botswana on a study tour,” Ramafole said.
“The moment cabinet makes any final decision on the issue it will be properly conveyed to you because it will then be for public consumption,” he said.
Ramafole sits in cabinet meetings as the secretary.
Khasu declined to comment saying the issue is “not yet ripe for consumption by the public”.
The Lesotho government already has a 30 percent stake in Letšeng Mine which is owned by the London-listed Gem Diamonds.
Letšeng Mine, which has been in commercial operation since 2004, has a total processing capacity of over five million tonnes per year and recovery of approximately 100 000 carats per year, which makes Letšeng Mine the seventh largest kimberlite mine in the world.
90 percent of diamonds recovered are gem quality, with a significant proportion graded as D colour. Over 70 percent of revenue is from diamonds in excess of 10.8 carats. The mine has produced several diamonds over 400 carats and numerous stones over 100 carats.
Letšeng Diamonds has recovered three of the world’s top twenty rough diamonds. These include the 603 carat Lesotho Promise in August 2006, the 493 carat Letšeng Legacy in September 2007 and the 478 carat Leseli la Letšeng in September 2008.
The 601 carat Lesotho Brown found in 1967 came from Letšeng Mine.
The government also holds 34 percent of Kao Mine whose majority shareholder is Namakwa Diamonds, another London-listed firm.
The Liqhobong Mine is operated by Liqhobong Mining Development Company (LMDC), which is 75 percent owned by a South African company Firestone and 25 percent owned by the government of Lesotho. The Liqhobong Mine is comprised of the Main Pipe and the Satellite Pipe, which cover 8.5 hectares and 0.8 hectares, respectively.
LMDC has been granted a mining lease by the government covering an area of 390 hectares in respect of both pipes which expires in August 2017, but is then renewable for a further 10 years.