PRESS STATEMENT BY NAMAKWA DIAMONDS LIMITED REGARDING THE SITUATION AT KAO
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.