Letseng Diamonds - Mining Outlook - issue 4

THE JEWEL IN LESOTHO’S CROWN

Characterised by its geographical position high in the Maluti Mountains of Lesotho, Letšeng Diamonds is known for its exceptional recoveries. We dig deep with CEO Motooane Thinyane to find out more about its mining operations Writer: Rachel Carr | Project Manager: Joshua Mann

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LETŠENG DIAMONDS AFRICA

A CUT A B OV E

W

ith over 80 percent of Lesotho residing 1,800 metres (m) above sea level, it is the southernmost landlocked country in the world.

It has the apt alternative moniker of the “Kingdom in the Sky”, as it is the only independent state on Earth that has such a lofty base altitude.

Lesotho is also home to Letšeng Diamonds, famous for its large, topquality gemstones.

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LETŠENG DIAMONDS AFRICA

Letšeng Diamonds’ open pit mine sits at an elevation of 3,200m, making it the highest diamond mine on the planet. The kimberlite deposits, from an igneous rock and a rare variant of peridotite, would later become Letšeng Diamonds’ and were discovered around 1957

by Peter Nixon, a British geologist.

However, the deposits had already been worked by artisanal miners, where it is estimated that between 1958 and 1968, approximately 1 to 1.5 megatonnes (Mt) of alluvial gravel had been treated.

Surface and underground sampling

by Rio Tinto Zinc (RTZ) occurred in the late 1960s and early 1970s.

Between 1972 and 1982, the mine was operated by De Beers until it was forced to close due to a downturn in the diamond market. However, it was not long until the untapped treasure deep inside the mountains of Lesotho was rediscovered and attracted global mining capital.

Letšeng Diamonds Discovery Centre

MINING OUTLOOK: HOW DO YOU MOTIVATE YOUR WORKFORCE, AND WHAT TRAINING AND EDUCATION PROGRAMMES DO YOU OFFER? MOTOOANE THINYANE, CEO: “Operating under extremes, we aim to release the potential of every employee by creating a work environment that is not only physically safe but also provides psychological safety for all. The mine is very remote from where people have families, and the physical conditions can also be very harsh. Therefore, it is essential to enable employees to do their best.

We focus a lot on human development by offering on-the-job, outcome-based training to improve the competency levels at both individual and team level.

“One of the core pillars of our safety culture is the Behaviour Based Care (BBC) programme, which puts safety at the front and centre of everything we do; it entrenches the behaviour of everyone always being a ‘brother’s keeper’.

“Under the mining agreement, the site has established an educational trust providing scholarship funding to deserving students. To date, the mine has educated and trained more than 50 students in various disciplines over the years. We also run an internship programme that offers eight to 15 students per annum the opportunity to work in different aspects of the mine operations.

Some recipients work for Letšeng Diamonds, while others have been gainfully employed elsewhere in Lesotho.”

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Worker in the sort house

“Letšeng Diamonds was established in Lesotho in 1995, leading to the first operating lease being granted in 1999 and production commencing in 2004.

The acquisition was finalised in 2006

by Gem Diamonds PLC (70 percent) and the Government of Lesotho (30 percent),” opens Motooane Thinyane, CEO of Letšeng Diamonds.

“Today, we employ around 1,500 people, both directly and through contractors. I joined Letšeng Diamonds in 2015 when it was looking for an engineering manager, and later became Head of Operations, responsible for overall mine functions, and at the beginning of July this year, I began my role as CEO,” he recalls.

RISING TO THE CHALLENGE Letšeng Diamonds is a place of extremities due to its location, making its operations isolated and challenging. With the high altitude of the mine and exposure to immoderate weather such as snow in winter and

Letšeng Diamonds Discovery Centre

exceptionally low temperatures or high winds, coupled with the difficulty of being remote, conditions can sometimes impact mining and treatment activities.

To achieve a solid operational performance, ensuring an efficient and effective strategy is essential during periods of working in a volatile environment. Letšeng Diamonds’ economic viability hinges on its ability to produce large gemstones.

Therefore, it has to employ relevant recovery processes to reduce damage and breakage of the

unusually sizable diamonds.

“Compared with other operations, Letšeng Diamonds has a very low average grade of less than two carats per 100 metric tonnes, which is probably the weakest of any commercially operating diamond mine. On the balancing side, the mine is endowed with fine-quality diamonds and one of the highest average monetary units per carat diamond,” reveals Thinyane.

The large, fine-quality diamonds are core to the uniqueness and, therefore, viability of the mine.

Mining Outlook Issue 4 | 5

Moving Africa Forward

“We are leaders in Mechanical Engineering” Based in Lesotho and entirely Basothoowned, MS Fabrications and Engineering Pty Ltd (MSFE) is a mechanical engineering company defined by its people-centric professionalism and commitment to its customers. With operations starting in 2016, MSFE has always strived to provide the much needed professional machining and welding services that Lesotho’s economy needs.

The company’s main original aim was to provide such services to the local agricultural industry, earth-moving equipment and logistics companies. Yet with time, MSFE recognised the need for expansion of services in its drive towards “moving the industry forward”. These were namely: mining, construction and logistics, and individual customers in the agricultural industry.

Today, MSFE’s central mission is to provide maintenance, fabrication, construction and manufacturing services within acceptable quality standards in the interest of all stakeholders through transparency and consistency, employing a professional, committed and wellmotivated workforce.

Our MSFE Services: • Coded welding compliant to ISO 3834-2 • Parent material identification - PMI • Non Destructive Testing - NDT • Mechanical Engineering design and consultancy • Coded welding services (SMAW, TIG, MIG) • Automated oxy-acetylene cutting • Fitting and machining (employing conventional machines: Turning, Milling, Drilling, Line Boring) • Repairs on pumps and pumping systems • Fabrications and erections of steel structures • Supply and installations of wear plates and hard facing materials • Condition monitoring Every company is motivated by their vision for the future. MSFE`s aim is to become a leader in the provision of mechanical fabrications and maintenance solutions and services in sub-Saharan Africa; a goal backed by its professionalism and industry expertise.

The company’s leadership is aware of the interconnectedness of the global economy and intends to become a major player as it realises its growth, particularly embracing the Africa Continental Free Trade Area (AfCFTA). Hence, there is an aggressive drive to acquire certification for International Standards such as ISO 45001, ISO 14001 and ISO 9001, which is commonly known as SHEQ, an Integrated Management System.

Furthermore, the company has already acquired certification for ISO 3834 part 2 of 2021. It is a standard based on ISO 9001, specifically tailored for industry related to the quality requirements for fusion welding of metallic materials and related services in both the workshop and at field installations.

Building Africa Part by Part P.O Box 13676, Maseru 100, Lesotho +266 5849 5006 | +266 6381 6310 +266 5873 8807 | +266 22314496 msfabricationsengineering@gmail.com motlatsisekhesa@gmail.com info@msfabrications.co.ls www.msfabrications.co.ls

LETŠENG DIAMONDS AFRICA

At present, the industry faces various challenges that are also affecting other sectors, such as global economic impacts, increasing input costs, supply chain disruptions, exchange rate fluctuations, and diamond prices. Furthermore, climate change and commitments to reduce the carbon footprint produced by mining are always at the forefront of operations.

“Particularly for us, there is a need to access clean power and manage the cost of production against an ore body that is getting deeper and therefore more costly to access and develop,” he shares.

UNEARTHING SIGNIFICANT MINE FINDS LESOTHO BROWN – Recovered in 1967 at 601 carats.

LESOTHO III – 40.42 carats marquise, given to Jacqueline Kennedy on her engagement to Aristotle Onassis in 1968 STAR OF LESOTHO – Discovered in 2004, the large diamond is 123 carats.

LESOTHO PROMISE – In 2006, the 603 carat white diamond was given a D rating, the top colour for diamonds.

LETŠENG LEGACY – 2007 witnessed the discovery of a 493.27 carat diamond. It was sold to the Graff-SAFDICO partnership for USD$10.4 million.

LESELI LA LETŠENG – In 2008, Gem Diamonds PLC announced that a highquality 478 carat diamond had been found — a type II D colour with no inclusions visible in its rough form.

LETŠENG STAR – The 550 carat diamond was found in 2011.

LETŠENG DYNASTY AND LETŠENG DESTINY – In 2015, the discovery of two large diamonds was announced at 314 carats and 357 carats, respectively.

LESOTHO LEGEND – The largest diamond ever discovered at the Letšeng Diamonds mine in 2018. In the same year, a light brown diamond of 357.67 carats was found.

LETŠENG DIAMOND – The 13.32 carat pink diamond was recovered in 2019 and sold for USD$8.75 million.

LETŠENG ICON – The 439 carat Icon was recovered and sold in 2020 for USD$16.1 million.

LETŠENG PRINCESS – In 2021, the 367 carat stone was sold into a partnership arrangement for USD$9.6 million which means that Letšeng Diamonds will also participate in the margin uplift on the sale of the polished diamonds.

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A MINING MAVERICK Although Letšeng Diamonds follows a traditional model for open pit operations, where the geological work is undertaken to define the mineral resource, leading to mine planning, some of the gemstones produced from a relatively small volume of kimberlite ore have been amongst the world’s largest and highest-value diamonds.

“The mining operations involve ore extraction and processing. We have a mining contractor who undertakes the drilling, blasting, loading, and hauling of waste and ore. The ore extraction operations are also run by a contractor following standard crushing, scrubbing, screening, dense media separation, and sorting processes using X-ray technologies and hand sorting,” Thinyane outlines.

The standard processes sometimes yield unexpected results, as the world’s fifth largest diamond of gem quality was recently unearthed from the Letšeng Diamonds mine. When the astounding 910 carat gem was discovered, it was reputed to be

LETŠENG DIAMONDS AFRICA

Sustainable Rehabilitation Cause leads to effect E-TEK applies this scientific principle to formulate strategies, expand our knowledge and maximise resource extraction.

Our goal is to sustainably regenerate the earth. E-TEK embodies teamwork and our project teams consist of an integrated network of internal and external specialists, providing invaluable expertise pertaining to each project undertaken.

The extensive practical and hands-on experience of the various team members makes E-TEK an obvious choice for practical and sustainable Mining, Rehabilitation and Environmental solutions.

Our Footprint

From the future of mining to the future of the earth E-TEK was established in 2007 and is a team of dedicated specialists, focusing on Mining and Industrial activities. Our approach to design is research-based while implementing Environmental Management strategies.

E-TEK currently provides services to a variety of clients across Southern Africa, including South Africa, Botswana, Zimbabwe, Namibia, Lesotho, Eswatini and Burkina Faso.

Ubuntu Safeguarding future generations through sustainable practices E-TEK not only cares about the natural environment but also the people living and depending on it. Through our partnership with Mosaic, we give back to our community through various sustainable initiatives and strive to sustainably regenerate the earth one project at a time.

Within an ever-changing environment, E-TEK is passionately committed to providing our clients with environmentally sustainable solutions through our collective set of skills, knowledge, and experience in the environmental, industrial and mining sectors.

11 Luke Street, Potchefstroom, North West, South Africa, with branches in Pretoria and Johannesburg. +27(0)18 294 3652 | admin@etekconsulting.co.za | www.etekconsulting.co.za

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LETŠENG DIAMONDS AFRICA

worth approximately USD$40 million.

Representing near perfection on the diamond-grading scale, the colourless stone belongs to a category that represents less than one percent of all mined diamonds in the world and is one of the most expensive in history.

“As a requirement of our mining agreement and a sign of commitment to the community, the mine allocates one percent of dividends declared or M5 million, whichever is greater, as an annual budget for the Community and Social Responsibility Investment (CSRI) projects. The agreement also commits the mine to allocate one percent of the “special stones” to a flagship community project,” he states.

FOCUSING ON THE FUTURE Letšeng Diamonds runs a CSRI programme to establish and maintain strong relationships with the local communities in which the mine operates, as well as with other 10 | Mining Outlook Issue 4

stakeholders and the entire nation of Lesotho, as part of its business strategy.

“We have adopted a three-pronged approach, looking at sustainable projects, worthy causes, and using a bottom-up approach in identifying

community needs,” highlights Thinyane.

The focus areas for the mine’s CSRI strategy are education, health, small and medium enterprises (SMEs), environmental conservation and management projects, donations to

LETŠENG DIAMONDS AFRICA POWERING YOU FORWARD

Commercial

POWERING YOU FORWARD

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“ONE OF THE CORE PILLARS OF OUR SAFETY C U LT U R E I S T H E B B C P R O G R A M M E , W H I C H P U T S S A F E T Y AT T H E F R O N T A N D C E N T R E OF EVERYTHING WE DO; IT ENTRENCHES THE B E H AV I O U R O F E V E R Y O N E A LWAY S B E I N G A ‘ B R OT H E R ’ S K E E P E R ’ ” – M O T O O A N E T H I N YA N E , C E O , L E T Š E N G D I A M O N D S

worthy causes, and infrastructure construction projects.

“We have a rolling five-year CSRI strategy based on community needs analysis, and this is governed by the CSRI committee of the Board, including community representatives.”

On the recovery of the special 910 carat diamond, known as the Lesotho Legend, a commercial egg production project was launched in the local community of Mokhotlong in 2019, in which local egg farmers are able to consolidate their produce and supply

eggs to the mine operations.

Other community flagship projects include the Wool and Mohair Promotion Project, the vegetable production project in the district of Botha-Bothe en-route to the mine, the commercial dairy project in the Mokhotlong where the mine is located, as well as the footbridge and classroom construction projects which were built in 2017 and 2019 respectively.

“Our key priorities are all aimed at ensuring the long-term sustainability of the mine operations, optimising

our requirements for stay-in-business capital, reviewing our business models, and managing the cost-pertonne to bring spending in line.

“We are also aiming to manage the unit cost of production with a specific focus on the power supply cost to the mine operations, optimising the mine planning and mining methods, and reviewing the business model to ensure maximum productivity of the adapted structures. We are also benchmarking against other mining operations on unit production costs,” Thinyane finishes.

LETŠENG DIAMONDS Tel: +266 2222 1800 communications@letseng.co.ls www.letsengdiamonds.co.ls Mining Outlook Issue 4 | 11

THE JEWEL IN LESOTHO’S CROWN

LETŠENG DIAMONDS Letseng Diamonds House, Cnr Kingsway & Old School Roads, Maseru, Lesotho Tel: +266 2222 1800 communications@letseng.co.ls www.letsengdiamonds.co.ls

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