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LETSENG DIAMONDS

feature


The Mountain Kingdom’s

(not so) little Gem

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Letšeng Diamonds focus MINING

Diamond mining company Letšeng Diamonds is nestled high in the breathtaking Maluti Mountains of the Kingdom of Lesotho.

By Marie Toms

D

iamond mining company Letšeng Diamonds is nestled high in the Kingdom of Lesotho’s Maluti Mountains. It is in fact the highest diamond mine in the world at over 3,000 metres above sea level. Letšeng’s story is an interesting one and began in 1995, when the previous General Manager, Mr Keith Whitelock commenced a process to re-open the Letšeng mine after De Beers had closed it in the early 1980s. In 1999, the mining lease for the Letšeng mine was acquired, during which time the South African company, JCI Gold, was the majority shareholder. It took a further five years for the mine to come into commercial production. In 2004 the mine had a single processing plant with the operation producing around 35,000 carats a year. Then, in 2006, Gem Diamonds Limited acquired JCI’s holding and became the 70 percent shareholder, in partnership with the Government of Lesotho, which holds the remaining 30 percent. In 2007, Mazvi Maharasoa joined Letšeng as the Company’s Resident Director and was appointed as CEO of Letšeng Diamonds in November 2009. The Letšeng mine is believed to be the seventh largest processing kimberlite mine in the world, with an estimated 35year mine life. “Processing kimberlite ore and liberating the diamonds is Letšeng’s core business, and upon taking control of Letšeng, the first order of business for Gem Diamonds was to approve an expansion plan, which saw the construction of a second processing plant, bringing the processing capacity of the mine to circa seven million tonnes of ore,

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Letšeng Diamonds focus MINING

producing circa 100,000 carats per annum,” explains Maharasoa. Speaking to South Africa Magazine in January she said that Letšeng is increasing the annual treatment capacity of the mine to around 10 million tonnes per annum, with a carat output rising to around 200,000 carats per annum. Outlining the expansion project, known as Project Kholo, Maharasoa added, “Our business strategy is growth. The mine fundamentally needs to continue to drive costs down, improve efficiencies and maximise revenue. Both the Letšeng and the Gem Diamonds Boards approved the expansion project in November 2011. Project Kholo will commence in January 2012 and when this expansion is complete, the Letšeng mine will rank amongst the top four largest kimberlite diamond mines in the world.” The total project capital expenditure for Project Kholo is estimated at $280 million. “The expansion project at the Letšeng mine is a major step forward,” added Stephen Gould, the Chief Operations Officer of Letšeng Diamonds. “The number of carats of diamonds that we produce will effectively be doubled. Through Project Kholo we will be improving the recovered grade through the increased liberation of diamonds from the kimberlite ore, while we introduce new technology to reduce diamond damage and unit costs.” Gould said the requirements of project Kholo go far beyond just increasing the capacity of the treatment plants and that the current open pit mine will increase in depth from 150 to 500 metres. In 4

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order to expose sufficient ore for the plants, the waste mining activity has to increase from moving 15 million tonnes of waste per annum to in excess of 60 million tonnes per annum. This will further increase job opportunities at the mine. In order to improve the efficiency of this large earthmoving operation, the size of the equipment employed will be increased by a factor of three, he said. “The challenge of providing the increased power required is being carefully managed, and currently the plan is to increase the capacity of the current power line. However, this will stretch power supply to its limit, and in order to cater for a possible underground mine in the future, other options such as a second line and the possibility of using wind generated power are being looked into.” “I am extremely excited for the future,” Maharasoa added, explaining, “There are a great many factors for contemplation and great potential for growth and development at Letšeng. Strategically, Letšeng is looking at ways to increase the business potential in terms of developing in-country diamond cutting and polishing facilities, known as beneficiation.”


Alliance Insurance Company Lesotho provides Short-Term Commercial Insurance and Personal Insurance, as well as Life Assurance Products and services. Alliance has built a sustainable relationship with Letseng Diamond Mine since the beginning of the mining operations and continues to be a proud service provider of choice for the mine’s Short Term Insurance needs. Alliance is heavily involved in Lesotho as a Short Term Underwriter in Mining, Engineering, Construction, Contractors Guarantees and Professional Indemnity covers. Our Life business unit offers market leading Funeral products, Group Life and Employees Benefits Schemes. As a proudly Basotho owned Insurance company, Alliance Insurance recognises the need to play an active role in community life and reach out to different groups and organisations through various Corporate Social Responsibility initiatives; this is made possible by our products which are geared towards reinvestment in the community ensuring that everybody benefits from their alliance with us. We continually strive to deliver unsurpassed customer experience through our innovative product offering and relevant value added insurance solutions specifically tailored for our market.

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Alliance House, 4 Bowker Rd, Maseru Lesotho Email: info@alliance.co.ls Web: www.alliance.co.ls

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Letšeng Diamonds focus MINING

The diamonds produced at Letšeng sell for the highest price per carat of any kimberlite mine, with a grade of less than two carats per hundred tonnes, and although the Letšeng mine is characterised by a low-grade ore body, producing less than two carats per 100 tonnes of ore mined, it is also renowned for producing some of the world’s largest, most exceptional diamonds. The Mountain Kingdom’s gems are amongst the very best in the world and approximately 35 percent of the world’s supply of diamonds larger than 10.8 carats in size are produced at Letšeng with around 90 percent of the diamonds recovered at the Letšeng Mine being gem quality. Over the years, the Letšeng Mine has recovered some of the world’s largest rough diamonds such as the 603 carat Lesotho Promise, the 493 carat Letšeng Legacy, the 478 carat Light of Letšeng and the 550 carat Letšeng Star. “The expansion project will enable us to increase the volume of this high value production even further, thereby allowing us to invest in appropriate cutting and polishing technologies in order to participate 6

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downstream and maximise revenue potentials,” Gould told us in January. “Letšeng’s diamonds are extremely valuable and so we are looking at all downstream options in order to capture additional margin beyond the mine gate. We are becoming increasingly successful in selling rough and polished diamonds, with good margins being realised. A cutting and polishing facility will be built in Maseru, Lesotho. Naturally this will create jobs locally and would be positive for Lesotho. Mining is an extractive industry, however, it is a finite resource, so you need to have as many economic linkages with the community, and national economy as possible – it is just good corporate practice. “From cutting and polishing you can have spin-off industries such as the jewellery manufacturing industry, which can create SME enterprises and additional employment,” he added. “That really is our objective. We want to put the seeds down for economic development from the mining industry.” END To learn more visit www.letsengdiamonds.co.ls.


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Letseng Diamonds Business Brochure - South Africa Magazine Issue 30

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