PRESS STATE­MENT BY NA­MAKWA DI­A­MONDS LIM­ITED RE­GARD­ING THE SIT­U­A­TION AT KAO

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Na­makwa Di­a­monds Lim­ited (“Na­makwa”) is the ma­jor­ity share­holder and sole fun­der of Storm Moun­tain Di­a­monds (Pty) Ltd (“SMD”), which op­er­ates a di­a­mond mine in the Kao area of the Butha Buthe dis­trict in Le­sotho. SMD is owned jointly by Na­makwa and the Govern­ment of Le­sotho. The Govern­ment of Le­sotho holds 25% of the shares in SMD. The di­a­mond re­source that SMD mines at Kao is the largest kim­ber­lite pipe in Le­sotho.

Kao has again, from 30 May 2018 un­til the time of pre­par­ing this state­ment, been plunged into chaos. Crim­i­nals have again van­dalised mine prop­erty on and off of the min­ing lease area. The van­dal­ism has again brought the mine to a stand-still. The hall­mark of this ac­tion is once again un­law­ful­ness. The rea­sons for the crim­i­nal acts are once again un­clear. The pre-text used in the past – the com­mu­nity griev­ances – are no longer pro­vided as rea­sons. We do know that in stop­ping the mine the per­pe­tra­tors achieve their stated ob­jec­tive, as ut­tered by their leader on many oc­ca­sions. We also know that the per­pe­tra­tors do not rep­re­sent the in­ter­est of the com­mu­nity, as com­mu­nity mem­bers are dis­tanc­ing them­selves from the ac­tions of this mob.

SMD knows that the ma­jor­ity of the lo­cal com­mu­nity mem­bers are law-abid­ing and wish to live and work in friendly co-op­er­a­tion with the mine. The un­law­ful ac­tiv­i­ties of the mi­nor­ity are im­pact­ing neg­a­tively on the rest of the com­mu­nity and on the mine. It is im­per­a­tive that peace­ful co-op­er­a­tion is re­stored. SMD wishes to work closely with the lo­cal com­mu­nity mem­bers to as­sist in im­prov­ing their liveli­hoods and en­rich­ing their lives. How­ever, progress in im­ple­ment­ing sus­tain­able ini­tia­tives and im­prove­ment projects are de­railed by the crim­i­nal ac­tiv­i­ties at Kao.

The ques­tion then re­mains: what sits be­hind the crim­i­nal ac­tions? The an­swer ap­pears to be, as it so of­ten is in Le­sotho, pol­i­tics. We have fac­tual ev­i­dence that of the per­pe­tra­tors are in di­rect com­mu­ni­ca­tion with high-rank­ing politi­cians, in­clud­ing Min­is­ters in the Cab­i­net. It seems that there is a po­lit­i­cal agenda in cer­tain quar­ters to desta­bilise the min­ing sec­tor, ap­par­ently in the hope that the mines can fail and that rights can be dis­trib­uted to in­cum­bent op­er­a­tors, with largesse and ben­e­fits to lo­cal politi­cians and oth­ers. In this ar­range­ment the lo­cal of­fend­ers are used as agents by the politi­cians, with the prom­ise of some ben­e­fit.

In this con­text the un­law­ful and crim­i­nal ac­tiv­i­ties take on an­other di­men­sion, that of sub­ver­sion and sub­terfuge: of acts prej­u­di­cial to the pub­lic or­der; acts in­cit­ing vi­o­lence, dis­or­der, de­fi­ance and dis­obe­di­ence to the laws of the King­dom; and, acts di­rect­ing and or­gan­is­ing peo­ple to per­form un­law­ful acts. Ac­tions such as these, which can lead to the desta­bil­i­sa­tion of the min­ing sec­tor, are and should be of great con­cern to the Govern­ment of Le­sotho, as it jeop­ar­dises not only the vi­a­bil­ity and sus­tain­abil­ity of the min­ing sec­tor, but also the in­ter­nal se­cu­rity of the coun­try.

In the Govern­ment/pri­vate sec­tor part­ner­ship the obli­ga­tion of the pri­vate sec­tor part­ner is to pro­vide cap­i­tal for the project, and to gen­er­ally op­er­ate within its li­cence. Na­makwa, as SMD’s ma­jor­ity share­holder has in­vested large amounts of cap­i­tal in the project, and SMD op­er­ates in ac­cor­dance with the laws of Le­sotho, and in com­pli­ance with its min­ing li­cence.

The obli­ga­tion of the Govern­ment in the part­ner­ship in­cludes cre­at­ing and main­tain­ing con­di­tions suit­able for sus­tain­able busi­ness con­tin­u­a­tion, where these are within the am­bit of Gov­ern­men­tal con­trol. In­cluded in this obli­ga­tion is the duty to en­sure that the Rule of Law is pre­served, that crim­i­nal and un­law­ful acts are pre­vented where ever pos­si­ble, that law-abid­ing per­sons are pro­tected, that crim­i­nal acts are in­ves­ti­gated, and that per­pe­tra­tors be held ac­count­able and brought to jus­tice.

The crim­i­nal ac­tiv­i­ties at Kao per­sist. With­out fear of crim­i­nal sanc­tion or other con­se­quences of their ac­tions, they will not be de­terred from com­mit­ting these crimes. This will have dire con­se­quences for the mine. The sit­u­a­tion at present, and the lack of con­se­quences for per­form­ing un­law­ful ac­tions have re­sulted in brazen and de­fi­ant acts by com­mu­nity mem­bers who act with im­punity.

Whilst the Le­sotho Mounted Po­lice Ser­vices have ad­mirably as­sisted SMD with the pro­tec­tion of the safety of per­sons and as­sets, there has been a seem­ing re­luc­tance to make ar­rests for un­law­ful ac­tiv­i­ties. We have fact-based rea­sons from which to con­clude that there are po­lit­i­cal rea­sons which pre­vent the po­lice from do­ing so. Due to po­lit­i­cal fet­ter­ing the po­lice are un­able to act and are forced to sim­ply stand by and watch as the crim­i­nals vi­o­late the law. SMD has laid nu­mer­ous crim­i­nal charges with the Po­lice, in­clud­ing charges against the leader of the Com­mu­nity Com­mit­tee at Kao. He was in fact ar­rested by the Po­lice for ques­tion­ing, but ap­par­ently the Po­lice were “told” to re­lease him, and that this “in­struc­tion” came from out­side the Po­lice struc­tures.

Given that the Po­lice Ser­vices Act 1998 pro­vides that the mem­bers of the Po­lice force do not fol­low in­struc­tions from any­one out­side of the Po­lice force, and that the Po­lice are by law re­quired to be in­de­pen­dent in car­ry­ing out their obli­ga­tions, we won­der how this is pos­si­ble. Fur­ther­more, we un­der­stand that the Po­lice were ques­tioned on this is­sue by the rel­e­vant Par­lia­men­tary Port­fo­lio Com­mit­tee, which also hints at the level of po­lit­i­cal in­ter­fer­ence. We know that the Po­lice, if left to carry out their du­ties with­out fet­ter­ing from politi­cians, will do so in an un­bi­ased way, and will re­store peace and or­der at Kao, for the ben­e­fit of Le­sotho.

Po­lice num­bers have been low at the mine over the last few days, and this has cer­tainly pre­vented the Po­lice from do­ing their job. The weather has also de­layed the de­ploy­ment of more Po­lice Of­fi­cers. How­ever, should the un­law­ful acts of the pro­test­ers not be stopped promptly, the mine will not be able to re­sume its op­er­a­tions. This will lead to fur­ther losses:

• For each day that the mine does not op­er­ate the coun­try loses ap­prox­i­mately M202,500.00 in rev­enue in roy­al­ties alone;

• The mine and its con­trac­tors cur­rently em­ploy ap­prox­i­mately 659 Ba­sotho, in­clud­ing ap­prox­i­mately 160 mem­bers of the lo­cal com­mu­nity, all of who can lose their jobs;

• The state will lose fur­ther in­come in the form of taxes gen­er­ated by the mine. From Septem­ber 2013 to April 2018 SMD has con­tributed ap­prox­i­mately M413 mil­lion in roy­al­ties and taxes to the fis­cus. This fig­ure ex­cludes the tax con­tri­bu­tions of its con­trac­tors, which fig­ure will be sig­nif­i­cant.

Na­makwa needs as­sur­ance from the Govern­ment of Le­sotho that it will, through its ex­ec­u­tive and other or­gans, take the ur­gent steps re­quired to bring this an­ar­chy to an end. The Govern­ment must re­store law and or­der. Per­pe­tra­tors of crim­i­nal acts must be ap­pre­hended and brought to jus­tice. The mes­sage that in­ac­tion and com­plic­ity sends to the out­side world is not favourable. The stop­page of a mine in these cir­cum­stances will send a clear mes­sage to for­eign in­vestors, in­clud­ing the ma­jor banks, the World Bank, and the IMF, that their in­vest­ments are not safe in Le­sotho. With­out on­go­ing for­eign in­vest­ment, Le­sotho will cer­tainly not be able to meet any of its de­vel­op­ment ob­jec­tives.

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