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Letšeng Diamonds produces the highest quality white diamonds of anywhere in the world. Jane Bordenave investigates the challenges associated with extracting them and how the company is working to overcome these
etšeng Diamonds was registered in 1995 and granted the mining lease in 1999. The Letšeng Diamond mine is the highest diamond mine in the world at over 3,000 metres above sea level. It is also the producer of the highest quality kimberlite diamonds globally, with an average market value of over $1,700 per carat—nearly 20 times the market average.
While commercial production began at the site in 2004, Letšeng Diamonds is not the first company to carry out extractions in the area. Initial exploratory work was carried out at the mine in 1936 and until 1986, it was operated by diamonds giant, De Beers. When the facility closed due to adverse economic and market conditions, it spelled the end of the diamond mining industry in Lesotho for 13 years, until Letšeng Diamonds was granted the mining lease in 1999 and began commercial production in 2004. The company has two shareholders, Gem Diamonds Ltd and the Government of Lesotho. The whole operation, managed by an experienced management team, is overseen by Mazvivamba Maharasoa. “I have been involved in Letšeng Diamonds since its inception, working as part of the government legal team and later sitting on the board as a government-appointed director,” she says. “I came on board full time in 2007 in the position of resident director and am now the CEO.” Despite the fact that the mining industry is largely male dominated, Maharasoa
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showed herself to be the right person for the job and was appointed CEO in 2009. Although the Letšeng mine is characterised by a low-grade ore body, producing less than two carats per 100 tons, it is also renowned for producing some of the largest diamonds, such as the 603.5 carat Lesotho Promise, the 493 carat Letšeng Legacy and the 478 carat Light of Letšeng —the thirteenth, sixteenth and seventeenth largest white diamonds ever found, respectively. There are, however, certain difficulties associated with extracting diamonds from the Letšeng mine. The location of the mine itself presents some logistical challenges due to its geographical location and altitude. The facility is subject to severe bad weather, particularly during the winter months. At these times, temperatures can reach minus 30 degrees Celsius, which can present technical problems, as well as being potentially uncomfortable for the workforce. To overcome these
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problems, the company has implemented various systems, such as ensuring that the site is self sufficient in terms of water supply and that it has back-up power. Additionally, the site only has one main access road, which is very mountainous and is shared with the entire northern district of Mokhotlong. When moving heavy equipment into the site this can cause logistical challenges; but fortunately, bringing heavy machinery onsite is not a day-to-day occurrence.
Processing ore and liberating the diamonds is the company’s core business, and thus Letšeng’s most recent large capital investment was the construction of a second ore processing plant at the mine. The $50 million project ensures that the diamonds are liberated and processed carefully but rapidly. The diamonds are then sorted and securely transported for sale in global markets. Most of the management’s energy is focused on geological surveys and monitoring the ore body. “Keeping an eye on the resource is an important part of any mining plan,” says Maharasoa. “However, due to the grade and resultant margins, we have to pay very close attention to this area and allocate additional resources.” Aside from the geology and geography of the mine, another challenge that the company has faced is a severe skills shortage in the country. “There are two reasons for this problem,” says Maharasoa. “Firstly, there is a lack of adequately qualified and experienced engineers globally. While we are a Lesotho-based outfit, we compete on the global diamond market and all of our competitors are looking for the same skills
sets to work in their mines. The number of skilled engineers has decreased significantly in the past few years, so it really is a problem for everyone.” This is compounded by the second issue—a local lack of experience in commercial mining. When the mining business dried up in Lesotho during the mid 1980s, the skilled workers moved into other areas such as South Africa, leaving Lesotho high and dry. To overcome this issue, Letšeng Diamonds invests in the skills set of the local Basotho to increase the pool of human resources available. “Currently we have 23 students who we are putting through tertiary education,” explains Maharasoa. “They are being trained in mining-specific
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skills such as mining engineering, geology and so on. We have reached a stage in this programme where we are beginning to reap the rewards, and have recently employed four graduates from the scheme.” The company has also set up several community investment schemes to benefit the population as a whole, not just those employed by the mine. The north of Lesotho is particularly known for its wool and mohair farming, so Letšeng Diamonds has decided to invest in this area to assist commercial enterprise. Additionally, it has developed infrastructure to enable a local community to develop a thriving eco-tourism business. “Education and enterprise development are sustainable and extremely
important to us and we aim that, when the mine eventually runs out, these businesses will be around for a long time afterwards,” says Maharasoa. So where does Maharasoa expect to see Letšeng Diamonds in five years’ time? “We are working to optimise our business right now to enable future growth. In five years, I hope to have seen growth in the region of 30 to 40 per cent and the business working as a highly efficient operation. We are also looking into the opportunity of adding value to our own product, by participating downstream—cutting and polishing our own stones to sell as a finished product. This is something I hope will be an established contributor to our bottom line by 2015. And, of course, we are looking for the opportunity to increase production.” A diverse company indeed, providing a diverse future for both itself and the wider community. It’s not a claim every diamond mine can make; but it is a claim that this jewel in the crown of diamond production certainly can. www.letsengdiamonds.co.ls