2019 Mining Budget Press Statement

          By Rorisang Mahlo

“The Ministry of Mining is committed to develop, regulate and sustain a viable mining industry that promotes sustainable mineral resource exploration and exploitation through creation and provision of a conducive mining environment for the socio-economic advancement of the country.” This statement was quoted by Hon. Keketso Sello, the Minister of Mining while presenting the Ministry`s budget from the National Assembly of Lesotho on Tuesday, 26 March 2019.

In his budget presentation, Hon. Minister of Mining pleaded with the Honourable House to approve the total expenditure budget request of M42, 080,269.00 out of which:  M24,158,469.00 is for Recurrent Budget, while the sum of M17,921,398 is for Development Budget, and the Revenue Budget estimate is M627,916,575.00.

When reporting on the 2018/19 priorities, the Hon. Minister proudly reported before Parliament that his Ministry successfully managed to attain the following: 

  

Completed the 2015 Minerals and Mining Policy Implementation Plan and Ministry’s 2018-2022Strategic Plan, which was approved in November, 2018 and its Implementation Plan;

•     Ministry’s legal and legislation framework review in advanced stage;
•   With assistance from Ministry of Finance, the Ministry solicited support from the African Legal Support Facility (ALSF) to review the mining leases and legislative framework; 
•    In conjunction with the Lesotho Chamber of Mines, the Ministry held a successful “Mining Khotla” in November, 2018 where mining houses and business community interacted to explore opportunities that exist within the mining industry;
•   Two geochemical map sheets in addition to the existing 47 generated to update the mineral resources information, reaching a total of 49 out of 58 for the whole country;
•       Generated from target satellite image analysis for Ribaneng area on mineral analysis;
•       Fourteen prospecting licenses awarded;
•       Two new mining leases awarded;
•       One mining lease renewed.

  Forecasting for the 2019/20 financial year, Hon. Sello reported before the parliament that this year the Ministry is intending to ensure meticulous implementation of the following priorities: 

•    To complete the review of existing legal and regulatory framework for the mining sector and institutional arrangements to create an enabling environment for policy strategy that enhances competitiveness, transparency, predictability and consistency, as a catalyst for attracting more investment into the mining industry;
•       To intensify mineral exploration to determine potential mineral resources and reserves of the country through follow up exploration programmes on selected target areas;
•       To intensify and support mineral exploration in the country through, among other initiatives, construction of a fully-equipped Geoscience Laboratory facility for sample analysis;
•       To expand the mining industry by opening new mines and creating enabling environment for facilitating downstream activities;
•       To implement both the Minerals and Mining Policy Implementation Plan, and the Ministry’s 2018-22 Strategic Plan to improve the sector performance and optimise revenue collection;
•       To improve revenue collection from the mining sector by putting in place measures that help maximize revenue collection as per the new Policy Implementation Plan.

   To speed up the legal framework to accommodate revenue collection from the Artisanal and Small Scale Miners (ASMs) which is a preferential opportunity strictly meant for Basotho.

However, the Hon. Minister also conceded that “nobody said it will be a smooth ride throughout the year.” There were a number of challenges that hindered the Ministry from achieving an “A-star” financial performance; and to mention but, a few, the Minister reported as follows:

•   The Ministry had to no choice but depend on some of the resources of the mining companies’ such as “diamond valuation expertise” due to budgetary constraints; 
•       Insufficient budget for the Ministry to carry out its mandate, and implement the Minerals and Mining Policy Implementation Plan and the newly developed Strategic Plan.
•    Failure by some mining companies to declare dividends due to Government of Lesotho and to increase revenue collection;
•   Lack of infrastructural support and difficult terrain to mining areas, hence high startup capital costs for mining companies which discourage potential investors;
•       Lack of up-to-date information on the country’s mineral resources;
•    Delays in completion of architectural drawings for construction of Geosciences Laboratory, which  threatens allocation of funds in the future;
•   Inadequate human resources capabilities to monitor compliance and enforcement, and Ministry’s inability to retain skilled personnel;
•   The existing legal framework does not respond to the Minerals and Mining Policy aspirations, hence the current review process; and
•    Lack of diamond valuation skills which renders the Ministry to seek the services of a reputable Diamond Valuator despite the lack of the budget.

According to a Member of Parliament, Hon. Kimetso Mathaba, the Ministry of Mining is still challenged to assure the nation that the Mining companies report fairly on the proceeds from the diamonds that they sell abroad. “Currently the Ministry cannot assure this Honourable House of the true value of the diamonds produced in the country and the price that they fetch in the international market,” observed Hon. Mathaba.

In conclusion, the Chairman of the Natural Resource Portfolio Committee, Hon. Mpalipali Molefe also concurred that the House approve the requested amount by the Minister of Mining. However, Hon. Molefe stressed that it was high time that the Ministry made it easier for Basotho Artisanal Miners to benefit from their country`s mineral resources.  It was acknowledged, though, that considering the role that the Ministry is playing in terms of job creation and its contribution to the fiscus, the amount requested was still deemed very low.

All-in-all, the majority of the Members of Parliament present on the day, strongly recommended that the Ministry be allocated the budget that the Hon. Minister of Mining had presented before the House.

Botswana and De Beers Partnership Fascinates the Minister of Mining

        By Rorisang  Mahlo

“This is the glorious and the smartest partnership one has ever witnessed between Batswana and De Beers Group of Companies; and its best befitting description could be “a full mind-blowing and a unique economic revolution of its kind. Evidently, Batswana got it right the first time,” acknowledged Hon. Keketso Sello. 

Above all, “this portrays a picture of what the patriot has to learn and replicate for the benefit of the country- The Kingdom in the Sky.” This words were uttered by Hon. Minister of Mining in his analytical review at the end of a one day Diamond Conference held at Palm Hotel in Botswana, on 13^th of November 2018.

The Ministry of Mining in Lesotho was invited by their Botswana counterpart, Ministry of Mineral Resources, Green Technology, and Energy Security with the spirit of continuous engagement towards establishment of a multi-faceted bonds of assistance to each other for the socio economic benefit of the two diamond producing countries.

“What strikes me most is the fact that both Lesotho and Botswana got their independence in 1966 from Britain and the question is why did we not take the route that Batswana took while we were sharing so many things! Again both countries had a diamond prospecting interaction with the same company - De Beers, and why did we kill the goose that lays the golden egg by letting it go, “mofutsana ha ana laki maan,” said Hon. Sello shaking his head with disbelief. 

   

However, this year’s set theme was: “Leading Business for Social Capital” and the conference was discussing sustainable investment trends, consumer insights, strategic partnerships, building brand value, and the influence of diamonds and style, hence the involvement of fission sector, which was a unique and the stylish way of showcasing diamond in beneficiation with proper linkages to other sectors.   

The 2018 Botswana Diamond Conference was said to be on its fifth year with both  De Beers Group and Botswana’s Ministry of Mineral Resources, Green Energy and Energy Security teaming up to bring speakers from the world of government, industry, financial institutions, the media and fashion as part of the company’s partnership with the Government of the Republic of Botswana.

To mark the importance and the value attached to this event, the two Botswana partners opened this event with the high-profile speakers including a keynote address from His Excellency Mokgweetsi Masisi, The President of the Republic of Botswana. Also speaking at the conference was Honourable Eric Molale, Minister of Mineral Resources, Green Technology and Energy Security, as well as top executives from De Beers Group. The delegates from all over the world were roughly estimated at 600 people.

The De Beers Group Chief Executive Officer, Mr. Bruce Cleaver said, “Those in the private sector have an opportunity to build social capital not only through making investments in sustainable development, but also by sharing and communicating our insights. These include topics such as how to create stronger routes to market; how to build successful brands; how to foster competitive advantage; how to understand consumers; and how to communicate to the wider world.”

Furthermore, Mr. Cleaver went on to show that, meanwhile, their host countries and communities can support and accelerate it through activities such as creating a receptive and an enabling atmosphere; by matching skills development to meet the business sector requirements; and providing a secure and predictable environment in which enterprises can flourish to an extent of fully dominating in the process of job creation.

This event was closed by the top notch evening reception to celebrate the official launch of the first Forevermark Jewelry Store erected within the Sir Seretse Khama International Airport, by the guest of honour, Her Excellency, Mrs. Neo Masisi, the First Lady of the Republic of Botswana.

In general, the partnership between the government of Botswana and the De Beers Group of Companies comprises four companies, all operating from Botswana, and they are:

• De Beers Holdings Botswana- the exploration arm of De Beers in Botswana;
• Debswana- a 50/50 joint venture between the Government and De Beers, which is the primary producer of diamonds in Botswana;
• Diamond Trading Company Botswana (DTCB)- a 50/50 joint venture between the Government and De Beers, which sorts and values rough diamonds mined by Debswana; and lastly;
• De Beers Global Sightholder Sales (DBGSS), the rough diamond sales arm of De Beers, the company that is responsible for selling the bulk of De Beers’ global production to its rough diamond customers (called Sightholders).

According to the Online 2018 De Beers “Report to Society,” the 50 years old partnership seem to be paying dividends for the country and the Republic of Botswana is currently rapidly booming. “In every street and every corner of the main city and its outskirts, there are many new structural developments happening,” shows the report.

Finally, the Government of Lesotho, through the Ministry of Mining, is working very closely with the African Legal Support Facility (ALSF) and officials of the Ministry of Mineral Resources, Green Technology and Energy Security of the Republic of Botswana to exchange some thoughts on the new mining legislation for Lesotho. 

The Coincidence of Fancy Diamonds

By Rorisang David Mahlo

The Ministry of Mining is delighted to announce the recovery of two beautiful upmarket diamonds as thus: the 89.75 carats yellow diamond by LUCAPA Diamonds at Mothae, and the 29.59 carats Pink diamond by Storm Mountain Diamonds at Kao, named THE ROSE OF KAO, through the positively upcoming mining companies leased to commercially mine diamonds in the outskirt of Maluti Mountains of Lesotho.

These attractive diamonds which one of them (The Rose of Kao-Pink) is already exported to compete for the lucrative sales were recovered on different dates: The Rose of Kao (Pink) on the 12^th June, while the Yellow was on the 28^th June 2018. The remaining one (Yellow) is safely kept and awaiting the completion of the trial stage and LUCAPA`s approved sales and marketing contract by the Ministry of Mining.

No	Specs	Details	Pic by- SMD- Kao
1	Name	The Rose of Kao
	Weight	29.65 - Pre Boil: Post boil: 29.59 carats
	Colour	Pink
	Value	Pre - boil value of USD300 000/carats
No	Specs	Details	Pic by- LUCAPA- Mothae
2	Name	Not yet Named
	Weight	89.75 - Pre Boil
	Colour	Yellow
	Value	Not yet evaluated

Therefore, according to the statement released by Kao Mine Management, The Rose of Kao is estimated to be sold at value of $USDC 300 000 which could be estimated to the calculations of (8.88) Million US dollars, which is equivalent to M117 Million Maloti but with potential prospects to sell even much higher or less than the estimated value depending on the diamond market performance.

According to Gemological Institute of America (GIA) the quality of diamonds can be graded on four factors or 4Cs. These are the cut, clarity, color, and carat weight of the diamond. It is very important to note the characteristics of these precious stones while dealing with them. The degree of the color of these precious stones is tested over certain levels that generally range from colorless (D) to significantly colored (Z).

Therefore in this instance Lesotho is yet to rip the benefits of producing diamonds based on one of the four factors or 4Cs which is the “Colour.”

THE ROSE OF KAO as per the statement posted by SMD will go on tender at BONAS in Antwep, marketing company acting on behalf of SMD and KAO from the 17^th September. The Tender is expected to be closed on the 1^st of October 2018.

In nutshell, the marketing of the said Pink stone has already started and it is expected that it will attract a lot of attention from the serious buyers and highest renowned specialists of such stones.  

The Mining Directors Get Induction

           By Rorisang Mahlo

Mining Directors Round Table Discussion

In an attempt to introspect the efficiency and effectiveness in the regulation of the Mining Sector, the Ministry has identified a need to empower the Directors nominated to represent the Government in the Boards of various commercial mining companies. The Ministry, therefore, conducted an induction session for the Directors at the Ministry`s Boardroom on 29^th August, 2018 where they were equipped with necessary knowledge and tools to execute their duties and responsibilities as Members of the Boards.

When welcoming the Directors, the Principal Secretary, Mr. Ntahli Matete, strongly stressed his discomfort to discover that the Directors were operating in silos while they are expected to be singing one song with rhyming lyrics on their duties. “It is high time that we reconnect and try to standardise our mode of operation, such as our reporting frequency, and how we get feedback from your side on issues demanding our urgent attention,” said Mr. Matete.

Most importantly, “creating an internal communication strategy that will enable a simplified means of quicker communication among us without any hindrances can help quite a lot,” reiterates the Principal Secretary while opening the floor for everyone to share their views.

In his words of appreciation and on behalf of the rest of other Mining Directors one Director whose name is withheld due to security purposes acknowledged the Ministry`s gesture of bringing them on board as they might have experienced different challenges, and had to face them all by themselves. “We were feeling neglected and lost without our mother Ministry`s support,” said the Director. Adding that they cannot wait to hear where their jurisdiction starts and ends.

When getting to the core business of the day, the Chief Legal Officer, Ms. Mathealea Lerotholi, told them that, the terms of reference are prepared to assist the Government directors in clarifying responsibilities and ensuring effective communication between the Directors and Shareholder.

Adding that, in order to ensure that the Government is represented in the Mining companies’ Boards”, at least one director nominated by the Government shall be present for a quorum to be constituted said Ms. Lerotholi.

On top of all that, the Directors have responsibilities and duties which they are expected to perform, and amongst them, she highlighted the following in no particular order:

        I.            Participation in every board sitting;

      II.   Ensuring implementation of government’s interests,  integrity of the Company’s internal controls, and management information systems and that they are dealt in accordance with the law;

    III.  Ensuring compliance with mining leases, all major corporate policies and procedures that govern the Mining companies’ operations;

    IV.    Ensuring timely reporting of any other developments that have a significant and material effect on the companies Mining Lease agreements and the applicable laws.

Based on their clear mandate as presented, the Directors discovered that they need to up their game in order to perform to expectation. However, there were certain areas that appeared as matters concerned which they have deemed critical and worth shedding light with their Ministry leadership.

Amongst them were “If honestly we are vested with “Fiduciary Duty” as I consider this to be the core of our mandate, then this means we are carrying a responsibility that we also have to ensure accountability and transparency or else we will one day be cursed by grandchildren,” emphasised one Director whose name is withheld for their protection.

Also, another Director asked whether the Ministry was aware that as Directors, their powers are slightly limited, for instance, the Ministry is not represented in the process of marketing and selling of the diamonds at Antwerp in Belgium.

”The main reason why I say this is because I have realised that whatever the tender results that are being reported by the mining companies, it might not be the true picture of the reality as we are not privy to, and have no means to verify the information on the post-sale results of the diamonds”, said the Director.  

The Ministry was advised that, perhaps, it was high time that it acted swiftly to redeem this situation in order to realise the best sales returns, otherwise, the country will forever be cheated.

Finally, the Directors identified the need to involve Lesotho Revenue Authority (LRA) to ensure collection of all kinds of revenue. In this respect, the Deputy Principal Secretary (DPS), Mr. Lira Ralebese, assured them that, “We have just established a team of officials from both the Ministry of Mining and the LRA with clear terms of reference, aiming to achieve the objective of maximising tax collection” Mr. Ralebese reported.

The Ministry Intervenes on Kolo Fence Row

     By Rorisang Mahlo

 

Kolo Community Gathering 

In an attempt to avoid unnecessary conflict of interest between the villagers and Kolo Mine, the Ministry of Mining organised a public gathering as a platform to provide for the voice of the voiceless. The gathering was held at Kolo Ha Petlane on Friday the 18^th May, 2018 where all Stakeholder Ministries, the Local Council, the Civil Society Organisations and nearby villages were represented.

It is in this gathering where the former Mining Principal Secretary (PS) Mr. Soaile Mochaba, addressed the villagers and explained that the Mine was within its boundaries to extend their production area as it has been granted in their Mining Lease in the year 2011.

In his address PS Mining explained that “it is  a norm or a common practice in the diamond producing company to start by fencing only certain selected portion of a leased mining area, and later enlarge to the large area it had been allocated for as its operation may deem it fit to,” said Mr Mochaba.

In addition the Senior Mining Engineer Mr. Mohato Moima showed that villagers whose livelihoods would be affected by the mine`s operations (fence extension in this regard) would have to be compensated accordingly.

Hon. Putsoane- The Mascadel -MP-Kolo

On behalf of the people of Kolo Constituency and as Member of the Parliament, Hon. Putsoane Leeto- “The Mascadel” as nicknamed by his age mates, strongly indicated that “we as Kolo host Community are really not against Reskol Diamond Mine,  we are only not happy in the manner in which the extension practice was conducted,” said Hon. Putsoane.

Adding that “in this regard the Reskol Mine Operator wanted to portray us as delinquents while they have decided to ignore the proper procedures of tempering with the land though they are still holding the mining rights to use it,” said Hon. Putsoane. He insisted that “please do the honours that you are supposed to do and see if this community will not corporate with you,” added “The Mascadel”.

Most importantly, the majority of the locals were blaming the mining company of failing to give them a priority on the issues of employment and compensation for the land use that they have forfeited.  

However, the Reskol Diamond mine Manager did not deny the blame but simply clarified the general misunderstanding that, they might have started their commercial mining while they are not. “Reskol is currently at the Trial Mining Stage and we are just about to complete our trial stage. We are now only left with one kind of a Kimberlite, out of the four that we were supposed to take for sampling,” said Lehloholono Lesia.

Former PS-Mining- MR. Mochaba

In order to put this matter under control, PS Mining stood up to promise the villagers that their grievance has been heard and noted. “Therefore for the quick solution of this issue, I will give a directive to the Ministry`s Mines Community Resolution Team, to help us get to the bottom of this issue,” announced PS Mining. Specifically he promised the community that a specific date will be communicated with all role player first and the anticipated sitting will either be by the end of month May, if not the first week of June 2018.

In a nutshell, the Ministry has identified certain areas of importance that needs to be addressed in order to curb the prevalent situation at Kolo. First the mine will have to demarcate all the 25 square Kilometers coordinates granted in their lease. Secondly, to advise Reskol Mine to consider the importance of using the inclusive decision making, particularly on the issues of concern to the local communities.

 Finally, this company is expected to complete its trial mining by December 2018 after a lengthy suspension of their trial operations earlier this year with the challenges of their diamond plant configuration machinery.

Introduction of the First Coal Prospecting Company at Qhalasi

By Rorisang David Mahlo.

Unprocessed Coal Sample

Following the diversification attempts undertaken by the Ministry in the year 2017 through the signing of the Memoranda of understanding between Masemanzi Mining Holding and the Ministry of Mining, the Minister of Mining Hon. Keketso Sello brought a joy of hope to Qhalasi Community in Mohale`s Hoek.  “As the Minister vested with powers to govern and regulate the Mining in Lesotho, I stand here to introduce our Lesotho`s first Coal Mining Investor - Masemanzi Mining Holding to you and please accept him as part of you,” said the Minister with a smile of excitement for achievement.

This happened on Friday the 16^th March 2018 - a remarkable day of dances, ululations and joy during  the local commemoration of introduction of the first and the only coal mining company  that has started prospecting the feasibility of the existence of the coal at Majapereng and Matebeleng in Qhalasi within Mohale`s Hoek District.

Hon. Minister Sello on the Inspection

This event started with an inspection of the progress made to this far after the agreed dates of commencement of sampling stipulated in their work programme, that included activities of social participation and many other expected from the company. Therefore, this day was marked as the confirmation day and official introduction of the prospecting company after carrying out certain activities with the sceptic community that was a bit doubtful about the company.

Senior Officials at the Inspection

“I grew up in this place, heard and saw the clear proof of existence of this Mineral- coal in our area but as laypeople we always thought that ours were just a fugue while seeing Basotho importing coal from our neighboring country Republic of South Africa,” said Mr. Lethusang Tlaletsa. Adding that when they grew up as young boys looking after their forefather’s animals, they used to play with this special commodity innocently not even thinking that one day, the very same commodity will be regarded as something of good value in life.

Qhalasi Community During the Gathering

Most importantly, “today we are gathered here to celebrate and bear the witness of the official launch of our Coal Investor who has been with us for some time now since the year 2017 for prospecting,” said Mr. Tlaletsa. With the presence of the senior government officials of the caliber of Ministers, as according to him, the community and those that were skeptic about this Investor will now see the seriousness of this endeavour.

On top of that, Mr. Tlaletsa, indicated that it would be a remiss of him to step down without reminding the investor publicly that as a hungry community, they have securely kept all good promises made in their hearts and in the official documents shared with the authorities. Adding that in case everything comes out as anticipated they will be hungrily waiting with patience to see their dream come true as per the promises. “We still maintain our promise back that if you could adhere to our signed promises we will be the first one to protect you against all odds,” concluded Tlaletsa.

Exposed Natural Coal at the Site 

On behalf of the local youth, Motšoene Rakomane stood up to represent his local peers and passed on their heart felt gratitude now that something that is about to change their lives is yet to happen in their area. “Most of us in this area have no Mining qualifications but there are some who have studied from other fields that might be of assistance in the administration of the Mining sector, so we once again want to humbly ask you to also consider them for employment when there are vacancies,” requested Rakomane.

He went on to add that, “we also understand that for some of us who have not gone any far with schooling, we will think of establishing companies with services needed in the mining sector since this company cannot hire all unskilled local youth,” said Rakomane.

In response to the community needs and pledges, Mr. Wonderboy Manzini the Investor, stood up to reconfirm his promises to the local community and to give thanks for the hearty welcome that he received during his first arrival in the area. He went on to show that “I am hoping for best and harmonious relation between us, most especially when the project is up and running,” said Mr Manzini.

Exposed Natural Coal at the Site

Mr Manzini also announced that he is clearly very much aware that there have been many mining companies that came before his in Lesotho but he wants to run this mine differently to the way other Mining companies have done before. “I want to assure you publicly that, no one will ever come from South Africa to work for this company here,” announced Mr. Manzini.

Also he confirmed that it is his understanding that the project of this nature must bring community empowerment by all forms. Mentioning a few that “if this project will require electricity for its operations, definitely the local community will also have access to it, and if this company will need the access roads to and from the site, obviously the community will also benefit from such access roads, and even extend a helping hand to network even other close by villages,” reported Manzini.

On behalf of the Qhalasi Constituency Hon. Palo Leteetee thanked the right Hon. the Prime Minister and the Minister of Mining for pursuing this long awaited community development project. “This project started during our tenure of the governance and it makes us very proud that the present government took over all the good things that we did for the benefit of the people,” said Hon. Leteetee.

Hon. Leteetee & Hon. Sello on Site

Also in support of the vicinity constituency, the MP for Taung Selemo Mangoebe as a neighbour expressed that he felt a dire need to come and bear the witness and to give a backup support to his colleagues and the community at large, “We are afraid to even celebrate this overly, taking into account that this project is at its early stage- of Prospecting phase, which is vulnerable stage where it might happen to get some disapproving messages,” said Hon. Mangoebe  We are going to keep praying for the success of this project for the benefit of both Qhalasi and Taung communities.

       

In his keynote address the Minister of Mining accompanied by the Minister of Defence Hon. Sentje Lebona, started first by commending the Mining Officials who made that gathering a success. Singling out the office of Commissioner of Mines for exceptionally living up to his promise he made. “I want you to all know that this Ministry has been blessed with the special kind of civil servants who are ready to serve their nation at all costs and at all times - these ones never slag in their respective duties,” announced the Minister.

Secondly, reference to the Investor, Hon. Sello warned the investor that “gone are the days of selling the lip-language my man, this nation will be patiently waiting to see this project materialising here,” said Hon. Sello.

Protected Drilled Area for Sampling

Similarly, the Minister explained to the community that, currently the commercial mining operations have not yet started and asked them be a bit patient because when that moment comes, he promised that he will come again personally to throw a big party as Basotho`s traditional way of celebrating and declaring to their ancestors that Masemanzi is official operating in this country.

He also highlighted that if Qhalasi has initiated first, this might be a signal that might even provoke for more Coal Mining Investors to come and explore for more Coal opportunity in a bankable and sustainable manner in some other parts of the country just as diamonds did. “We optimistically hope that this is just the beginning of more good things yet to happen,” said Minister Sello.  

He finally concluded his speech by thanking Majantja for turning up in such big numbers for his call. “I truly feel privileged and honoured to officially be part of this history in the Making,” said the Minister.