LESOTHO’s mining industry is on the verge of a massive boom that will help transform the economy through more jobs and foreign currency earnings, says Mining Minister Lebohang Thotanyana.
In 2015, Lesotho adopted the Minerals and Mining Policy – the first time the country has developed a policy specifically focused on its mineral resources sector.
“I think it provides us with a very solid foundation for our mining industry policies and regulations,” Thotanyana said, adding that the policy was largely influenced by the Africa Mining Vision – the African Union’s blueprint to develop the mining sector in Africa.
The minister told Mining Weekly the government is also implementing legal reforms to modernise minerals legislation.
However, he emphasised that these changes will not create uncertainty because the rights of companies that have concessions in Lesotho will be secured by the new legal regime.
“We believe that during . . . the current financial year, the new mining legislative framework will be in place. We have started consulting with industry stakeholders and the drafting of a new legislation will start soon,” he said.
Thotanyana said the government wants to ensure that laws primarily promote investment in the sector by clarifying and securing investors’ mining assets.
The minister said it is critically important that these laws are instituted according to international standards, particularly in terms of environmental protection and health and safety standards, as “this will ensure that Lesotho’s mining industry is sustainable in the long term”.
Drafting new mining legislation also has to ensure institutional reform. Thotanyana said skills development programmes are crucial to ensure sustainable development in the sector.
The mining industry contributes 7.7 percent to Lesotho’s gross domestic product but the target is to increase contribution to 10 percent over the next five years.
Thotanyana pointed out that diamond mining company Gem Diamonds’ Letšeng mine has been Lesotho’s only diamond mine for many years.
However, diamond resources group Namakwa’s Kao diamond mine, in the Butha-Buthe district, came into operation in 2012, with the mine’s full effect on the country’s economy “currently being felt” as it has resulted in increased revenue generation.
Additionally, the minister highlighted that four new mines are set to open in the next year. These include diamond mining and exploration company Firestone Diamonds’ Liqhobong diamond mine. He noted that Firestone is spending US$220-million to develop the mine and will produce about one-million carats a year over a 15-year life-of-mine.
“We are also concluding the Mothae diamond mine transaction. Government is looking for a new operator for the mine, which is about 6 km from the Letšeng mine,” Thotanyana said. As reported in November 2015 Paragon Diamonds had entered into an agreement to buy diamond company Lucara Diamond Corporation’s 75 percent stake in the Mothae mine for US$8.5-million. Government approved the deal, but Paragon is yet to complete financing for the acquisition.
The minister further noted that French resources investment company Batla Minerals’ Kolo diamond mine, in Mafeteng, and Paragon Diamond’s Lemphane mine, in the Maluti mountains, are expected to enter production over the next two years.
“We want to increase Lesotho’s diamond production from its current 350 000 ct/y to about 1.5-million carats a year over the next two years”.
Thotanyana believes that this is “very possible” as production at Liqhobong is targeted at one-million carats this year. The minister said the growth in the mining sector will significantly reduce unemployment which is 27 percent nationally and 37 percent amongst the youths.
The mining sector directly employs about 3 000 people but this figure will double as the new mines come into production over the next two years, according to the minister.
“We hope that, by 2020, the mining industry will employ more than 10 000 people.”
The mining ministry will establish the Lesotho Diamonds Centre (LDC), in Maseru, this year, which will be a diamonds exchange platform for the buying and selling of diamonds. The minister estimates that the initial establishment of the LDC will cost about M10-million. He said the centre is intended to improve access to diamonds in the country, which is a long-standing challenge.
Lesotho is a diamond-producing country, but it has not been possible to buy diamonds directly from Lesotho.
“If one wants to address issues of beneficiation, it is imperative that diamonds are available locally to beneficiate.”
Thotanyana explained that the LDC will initially be a small ministry-driven project, which will focus on the evaluation of diamonds by grading and sorting the gems, as well as securing government revenues obtained from royalty payments.
It will also be mandated to collate correct data on the volumes of exported diamonds, which is a key requirement of the Kimberley Process.
Thotanyana said the LDC will initially be located at the ministry’s offices, in Maseru, but the long-term vision is to have it at or near to Moshoeshoe I International Airport, also in Maseru, to ensure that buyers can have easy access to the centre.
“This will also ensure greater security for the diamonds and buyers, as the diamonds will not have to be transported great distances.”
“Further, we want to use the LDC to address issues of artisanal and small-scale mineworkers because the country does not have this industry subsector in place – at least not as a legal, State-regulated industry.
“We cannot grant people licences when they do not have a market to which they can sell their product,” Thotanyana said.
The issue of illegal mining in Lesotho is currently very serious as the country has one of the highest concentrations of kimberlite intrusions worldwide.
“We have about 405 kimberlite bodies in Lesotho in the form of pipes, dykes or offshoots. This reality in a small country like Lesotho has resulted in villages and towns being built on top of large, valuable diamond resources, which means that ordinary people are often able to extract diamonds from their surrounding locations fairly easily,” the minister emphasised.
Currently, the ministry receives calls daily from police officials in South Africa informing them that people have been caught trying to sell illegal Lesotho diamonds in the country. “Therefore, it is a matter of necessity for us to manage this issue and the only way we can do this is by formalising the artisanal and small-scale sector and ensure that they can sell the diamonds they discover legally in Lesotho,” Thotanyana said.
Thotanyana told Mining Weekly that Lesotho’s relationship with South Africa “needs to be worked on”, as there is not a great deal of intergovernmental collaboration on mineral resources-related matters.
However, he notes that a team from the Ministry toured South Africa for several months last year to study the country’s mining sector.
“Nonetheless, we are also very wary of what we take from South Africa, as not everything . . . is applicable or meets the requirements of what is needed by Lesotho to further develop our mining industry.
“Lesotho and South Africa also compete for the same investment in our respective mining sectors. Therefore, we have an obligation to position ourselves to ensure we can stand out to global investors and differentiate ourselves from South Africa”.
Government regards knowing the precise extent of Lesotho’s mineral wealth “as a matter of great importance”, Thotanyana said.
There is budget for the Ministry to undertake the Lesotho Geochemical Mapping (LGM) project. Lesotho has to diversify its mining sector as much as possible to “aggressively attract” investment because mining has been identified as one of the key economic enablers by the Nation Strategic Development Plan, he said.
Government has, therefore, placed major emphasis on mineral research and ensured that this information is easily available to all potential mining investors. In 2015, the ministry released 33 new mineral geological maps of Lesotho and an additional 33 such maps were updated. The ministry intends to complete the mapping this year.
“In addition to the LGM project, we are working with Japan Oil, Gas & Metals National Corporation, which is employing remote-sensing satellite technology to identify the country’s mineral resources.”
Thotanyana pointed out that potential investors from China visited Lesotho in January on a fact-finding mission to assess exploration and development opportunities. The minister also told Mining Weekly that large multinational mining companies have expressed interest in investing in the country’s mineral resources sector.
“We are currently in advanced negotiations about facilitating their entry into the country.”
Moreover, Thotanyana pointed out that government has provided funding to build a laboratory in Maseru to allow for in-country research and provide, besides other services, indicative mineral resource reports for exploration and mining companies. Although the cost of building and equipping the laboratory has not yet been finalised, government has allocated M76-million for the laboratory project that will be undertaken in phases.
The minister expects that the laboratory will be operational by the first quarter of 2018, with limited capacity, which will be expanded over time.
Thotanyana says the laboratory will accelerate turnaround times for exploration and mining companies, which currently have to send test results to South Africa for analysis.
Why invest for the future
AN investment plan forms a critical pillar of a financial plan, says Tokiso Nthebe, a local author and financial services adviser.
Nthebe, the founder of TKO Financial Wellness and Advisory, says when people invest, they can use their money to buy assets that will increase in value over the long term.
He says these assets can help them build wealth.
“When you invest, your money starts to work for you by providing returns that will beat inflation,’’ Nthebe says.
Nthebe says there is a huge difference between saving and investing.
He says investing requires that you take some level of risk in exchange for an expected return or growth.
Nthebe says Basotho should consider many factors before they decide to start investing.
“It is important to have a clear strategy that guides your investment decisions and to work with qualified professionals,” he says.
Nthebe says one should consider their growth mind-set, investment goals, and their risk tolerance.
In addition, one should consider what kind of growth or return they expect.
He says one should find out whether the institution they invest in is licensed or regulated and how long one should invest.
Nthebe says one should further consider what risks are associated with the investment option and whether there are any associated costs.
He says it is also important to remember that investments take time.
“There are no short cuts to building wealth. Do not fall prey to get-rich-quick schemes,” he says.
Moreover, Nthebe says the investment landscape comprises commercial banks, asset management companies, and insurance companies.
He says each provides different financial products and services.
Nthebe says the Central Bank of Lesotho (CBL) also offers investment solutions such as treasury bills and treasury bonds that Basotho can consider.
Depending on your investment goals, he says financial service providers have a wide range of investment solutions to choose from that cater for short, medium, and long-term goals.
“I encourage Basotho to do thorough research and seek professional advice before making financial decisions,” he says.
Vince Shorb, the United States National Financial Educators Council CEO, writes that “many of the financial problems people face today started when they were young and making their first financial decisions”.
Shorb further says taking on too much debt, not investing early, and failing to plan can take one decades to recover from such.
However, it takes financial literacy to make good decisions, he says.
Financial literacy has been perceived as a tool that gives you the opportunity to be confident and empowered to live the quality of life you have worked hard for.
Shorb says one of the wisest decisions one can make to prepare for the future is to invest.
Investment has been defined as the commitment of funds with a view to minimising risk and safeguarding capital while earning a return.
When Covid-19 hit and the government shut down all gatherings in April 2020, there seemed no way out for ICONICS (Pty) Ltd, a budding events management company based in Leribe district.
They had two options: shut down or innovate to keep the business going.
They chose the latter.
Three years down the line, ICONICS (Pty) Ltd has completely transformed itself from an events management and public relations company into a manufacturing company that is now the envy of Lesotho.
“The closing of events translated into the closing of our business,” Rapitso Mosebetsi, one of the co-founders of ICONICS (Pty) Ltd told thepost this week.
Mosebetsi established ICONICS in partnership with Tumo Mahapa.
Faced with collapse, Mosebetsi say they began buying Personal Protection Equipment (PPE) such as surgical gowns, disposal coveralls and safety apparel for resale.
Eventually they decided to manufacture the PPEs and safety clothing. That was the turning point.
But since the company was already down, Mosebetsi says diversification was a hard nut to crack.
“It became quite a long journey (for us),” he says. “We had to come up with something new for the industry.”
He says they had to overcome stiff competition from giant companies and come up with something unique that would set them apart.
“That was how thermal heating apparel was born,” he says.
“We are the first company to produce thermal heating apparel,” he says.
The company manufactures thermal clothing, which is electric clothing, using power banks of five voltages.
“The voltage is so low to electrocute a person,” he says.
The clothing also has a power button to turn it on and off.
Mosebetsi says the thermal heating apparel is on corporate clothing as well as high-visibility clothing.
Mosebetsi says they started the journey with the support of several organisations, such as the Lesotho National Development Corporation (LNDC) and the Basotho Enterprises Development Corporation (BEDCO), to build their capacity.
Mosebetsi says they also got mentorship support from organisations such as the Global Entrepreneurship Network.
The results of years of hard work are now all out for everyone to see.
In 2022, ICONICS won the M100 000 Business Plan Competition hosted by BEDCO.
This grant enabled them to acquire land and buy five more industrial machines.
This did not only enable the company to increase their production to 100 worksuits a week, but it further created permanent jobs for five people as well as three temporary workers.
Last year, the company took part in the Exporter of the Year event hosted by the LNDC in partnership with the Lesotho Post Bank and the United States Agency for International Development (USAID).
Mosebetsi says they won the award for Lesotho’s most innovative and versatile exporter.
He says this did not only put them in the spotlight, but it further encouraged them to do more.
ICONICS was announced as the best exporter of the year at an event hosted by the LNDC earlier this month.
Mosebetsi says this made them proud, as the award is aligned with their vision.
The award further gives the company an opportunity to participate in the regional competition.
He says this opportunity will further give the company a competitive edge in terms of production locally and globally.
“It will be an honour if we can win the regional competition,” he says.
In terms of markets, Mosebetsi says the company has had the opportunity to list their products in the African Trade Market since 2020 with the support of USAID.
This is an e-commerce platform that opens up the market for African countries to list their products.
Mosebetsi says the company did not only get publicity, but the client database also increased.
He says they moved from supplying individuals only to big companies, different organisations, and different government departments such as those involved in mining and health.
Considering the decline of the Lesotho textile industry, Mosebetsi says their secret to success has been their being innovative.
“Our sustainability is matched with innovation,” he says.
Mosebetsi says it also requires patience coupled with lots of investment in terms of time.
“Rome was not built in one day,” he says.
He says working as a team also plays a critical role.
Despite their achievements, Mosebetsi says the market for innovative industries is one of the hardest nuts to crack.
He says the company is in the process of not only making their products known but also educating people about their safety.
Mosebetsi says the other challenge is the decline of the South African Rand as compared to the US Dollar.
He says some of their materials are sourced from China.
Therefore, it is more expensive to buy such materials.
ICONICS is not only seeking to make their brand well known globally, but Mosebetsi says they are also seeking to create more jobs for our youths.
LetsGo and Win!
LETSHEGO Financial Service has launched the LetsGo and Win loan consolidation campaign where customers win weekly and monthly cash prizes of up to M150 000.
The campaign, which was launched yesterday, will end on November 8.
The LetsGo and Win campaign rewards customers for consolidating their loans.
It is aligned with Letshego Lesotho’s version to offer competitive products that cater for the evolving needs of its customers.
The financial services company operates in Lesotho, Botswana, ESwatini, and Zambia.
The Marketing Manager and Business Partner, Tšotetsi Seema, said Letshego Lesotho is committed to delivering increasing value and options to customers.
Seema said this programme is a testament to that commitment.
“The campaign invites customers to consolidate their loans into one low and easy repayment with reduced rates and they stand to win weekly and monthly prizes,” Seema said.
“The weekly cash prizes will be won by lucky customers randomly selected and notified through Letshego Radio shows,” he said.
Additionally, he said two lucky customers will be randomly selected each month and given a chance to spin the wheel of fortune with a chance to receive a maximum of M20 000 each.
“The loans consolidation campaign makes it easier for customers to choose Letshego Lesotho as their preferred financial services partner.”
He said this innovative campaign aims to help individuals streamline their debt payment while benefiting from reduced interest rates.
“Debt consolidation can help customers get a lower monthly payment, pay off their debt sooner, increase their credit score and simplify their life.”
Letshego Lesotho’s Head of Sales, Distribution and Marketing, Motebang Moeketsi, said managing multiple loans can often be overwhelming with varying interest loans due dates and terms.
“The campaign addresses this challenge by combining multiple loans into a single, easy to manage repayment plan,” Moeketsi said.
He added that this simplification not only eases the financial burden on borrowers but also potentially leads to significant savings over time.
Moreover the new consolidation campaign invites customers to take advantage of their best-in-class financial services provided through Letshego Lesotho branch network and digital platforms.
“Letshego Lesotho is committed to increasing financial inclusion through its efforts to serve underbanked communities, promoting financial literacy and delivering positive social impacts for its customers and communities.”
Business2 months ago
Committed to creating jobs for Basotho
News2 months ago
Mahao faces WhatsApp storm
News2 months ago
Former minister Lehana dies
News2 months ago
Murdered woman’s family wants justice
News2 months ago
LEPOSA deputy president ousted
News2 months ago
Pushing synthetic agri-products
News2 months ago
Master goes AWOL
News2 months ago
Suspect in Matabane killing arrested