Call for in­creased lo­cal stake in min­ing

Lesotho Times - - Business - Bereng Mpaki

MIN­IS­TER of Min­ing, Keketso Sello, has em­pha­sised thee need to re­visit the coun­try’s min­ingg laws to en­able gov­ern­ment to have e a greater share in its mines for thehe ben­e­fit of lo­cals.

Mr Sello was ap­pointed d Min­ing Min­is­ter in June this yearr fol­low­ing the ad­vent of the fou­rur par­ties’ coali­tion gov­ern­n­ment made up of the All l Ba­sotho Con­ven­tion (ABC), ), Al­liance of Democrats (AD),, Ba­sotho Na­tional Par­tyy (BNP) and the Re­formedd Congress of Le­sotho (RCL)..

Also a Hlotse #13 Mem- ber of Par­lia­ment (MP)P) un­der the ABC ban­ner,r, Mr Sello said the cur­rentnt gov­ern­ment pol­icy where it held mi­nor­ity shares in thehe di­a­mond mines needed to be de­lib­er­ated on and re­vised.

Ac­cord­ing to the Mines and Min­er­als Act of 2005, the gov­ern­ment of Le­sotho has set it­self a min­i­mum of 20 per­cent shares in any pro­posed min­ing ven­ture.

Cur­rently, Le­sotho holds 30 per­cent free carry shares at Letšeng Di­a­mond Mine while the rest of the shares are held by United King­dom­based Gem Di­a­monds.

At Kao Di­a­mond Mine, the gov­ern­ment holds 25 per­cent shares while South African-based Na­makwa Di­a­monds holds the re­main­der.

ItI is the same sce­nario at Liqhobonghob Di­a­mond Mine where the gov­ern­ment­gov holds 25 per­cent of free car­rycar shares while an­other UKbased­bas in­vestor Fire­stone Di­a­monds ho holds the re­main­ing shares.

The gov­ern­ment holds 30 per­cent­cen shares at Mothae Di­a­mond Mine,Min with the rest in the hands of Aus­tralian-basedAus Lu­capa Di­a­mond Com­pany.Co

“It is a se­ri­ous con­cern for us and we are keen look into dis­cussing it in depth in or­der to s see how it can be re­vis­ited,” Mr Sello said in an in­ter­view with the Le­sotho Times this week.

“But ob­vi­ously we are go­ing to have to en­gage other stake­hold­ers if we are to take this dis­cus­sion for­ward to­wards pos­si­bly re­vers­ing the cur­rent sit­u­a­tion in our di­a­mond mines.

“This issue was never han­dled well from day one. It is mind– bog­gling that we have opted to al­lo­cate our­selves a smaller piece of the pie while giv­ing for­eign in­vestors the larger one in our own mines. That is not fair to the peo­ple and the issue needs to be treated with the se­ri­ous­ness it de­serves as it has be­come a na­tional con­cern.”

Also weigh­ing in on the issue, Direc­tor of the Trans­for­ma­tion Re­source Cen­tre Tsikoane Peshoane said by as­sum­ing mi­nor­ity shares, gov­ern­ment was also get­ting a mi­nor share of the prof­its.

Mr Peshoane fur­ther said by virtue of hold­ing ma­jor­ity shares, for­eign in­vestors were able to bring in ex­pa­tri­ate skills in or­der to pro­tect their in­vest­ments.

This was re­gard­less of whether or not such skills were avail­able in Le­sotho, a de­vel­op­ment which could lead to the sidelin­ing of lo­cals.

“Also, this means all ma­jor ex­ec­u­tive de­ci­sions re­gard­ing op­er­a­tions of the mines are left in the con­trol of for­eign in­vestors as ma­jor share­hold­ers,” Mr Peshoane said.

The min­ing in­dus­try cur­rently con­trib­utes just un­der 10 per­cent to the coun­try’s gross do­mes­tic prod­uct (GDP).

In view of this, Mr Peshoane said Le­sotho should take a leaf out of Botswana’s book where the min­ing sec­tor was one of the ma­jor eco­nomic driv­ers.

“Un­less the gov­ern­ment takes a bold de­ci­sion to do that, I am afraid the con­tri­bu­tion of the min­ing sec­tor to the coun­try’s eco­nomic de­vel- op­ment will re­main min­i­mal like it cur­rently is,” he added.

Min­is­ter Sello also be­moaned the lack of ben­e­fi­ci­a­tion in the min­ing in­dus­try, say­ing this was deny­ing the coun­try an op­por­tu­nity to cre­ate more jobs and de­velop lo­cal skills in or­der to max­imise eco­nomic ben­e­fits. Le­sotho di­a­monds are ex­ported to Bel­gium in their raw state.

Mr Sello said the gov­ern­ment had en­gaged a con­sul­tant in the draft­ing of a law that would al­low for pro­cess­ing of the di­a­monds in Le­sotho.

“Our cur­rent laws do not al­low clean­ing of di­a­monds and we need to amend our laws for those pro­cesses to take place. Once we start pro­cess­ing them, it would add a lot of value while also im­prov­ing con­trol of our di­a­monds.”

Mr Peshoane said by sell­ing rough di­a­monds, the gov­ern­ment was los­ing money it would have gained from the sale of pro­cessed di­a­monds.

“The gov­ern­ment should com­mit funds to­wards ben­e­fi­ci­a­tion in the sec­tor in or­der to in­crease the rev­enue col­lec­tion from the sec­tor as well as cre­at­ing jobs,” Mr Peshoane said.

Min­ing Min­is­ter Keketso Sello.

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