Call for increased local stake in mining
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.