Find Mining expertise in Lesotho

Deposits of coal, quartz, agate, galena, and uranium have been identified but are not yet commercially viable.

But the mineral that has attracted significant international investment is diamonds – Lesotho harbours some of the world’s finest examples. In May 2013, a 164-carat diamond worth £6 million was discovered in the country’s Letšeng mine, the same site that yielded the 14th largest diamond ever found two years earlier. Since 2004, the diamond sector has made an increasing contribution to GDP, which has seen the mining and quarrying sub-sector’s share in GDP from 0.9% in 2004 to around 4.5% in 2011.

Diamonds have also increased Lesotho’s export earnings since large-scale production began just over a decade ago, helping boost foreign exchange reserves. In 2011, diamonds accounted for 31% of the country’s total exports, as opposed to just 0.1% in 2002. Mining has also brought significant foreign direct investment into the country. Most of the major players in Lesotho’s mining industry are foreign companies such as Gem Diamonds and Firestone Diamonds, both headquartered in London. Gem Diamonds operates the Letšeng mine under the brand Letšeng Diamonds, in which the Lesotho government owns a 30% stake. The government has also retained a 25 per cent stake in Liqhobong mine, with Firestone Diamonds owning the remaining 75%.

Production of diamonds has increased from 13,089 carats in the first quarter of 2006 to 27,724 carats in the second quarter of 2012, though there was some fluctuation in between. Mining companies pay rent for the land they mine, as well as paying royalties to the government for each diamond found.

Mining and quarrying do not provide a significant source of employment in Lesotho. By the end of 2012 the diamond sector employed around 2,000 workers, which represents 0.3% of jobs in Lesotho. This is expected to increase by about a third by 2017, as mines expand their production capacity. In 2010 Lesotho’s extractive industry as a whole employed an estimated 2,270 laborers.

However, most Basotho undertake unskilled roles in the mines, as there is no provision for degree-level training in geology in Lesotho, with the result that mining companies bring in expertise from overseas for most skilled and management-level. Notwithstanding this, in the locality of the biggest mines, employment in the diamond mining industry has helped to lift many households out of poverty.

Sandstone can be found all over the country. It is largely exploited by small-scale artisan outfits, with only a handful of large commercial quarries currently in operation. Sandstone is a popular domestic building material, which also forms part of the country’s export market. The largest quarry is owned by Lesotho Stone Enterprises.

Clay deposits can also be widely found, much of which are used to manufacture bricks for domestic use, as well as for export to South Africa. Large-scale production is expected to increase in Ha Teko and Ha Motloheloa.

The main legislation governing extractives is the Precious Stones Order of 1970, the Mine Safety Act of 1981, the Mines and Mineral Resources Act of 2005, the Explosives Proclamation of 1958 and the Land Act (Amendment) of 2010. Lesotho also participates in the Kimberley Process Certification Scheme, with an average of 20 certificates issued per year since 2004.

The Ministry of Mining oversees the exploration of mineral resources, regulating and managing prospecting and mining activities to develop the mining sector in partnership with its stakeholders. It also seeks to ensure that mining takes place in an environmentally friendly and sustainable manner for the socio-economic benefit of the Basotho nation. By the year 2020, the government would like to see the Basotho nation improve its standard of living through proper management of mineral resources.

EITI status

Lesotho is not currently EITI compliant.