Relief as Hololo mine finally gets license
. . . long-running court battle finally ends
NEO SENOKO
MASERU – A tedious legal battle for the prospecting and mining rights of Botha-Bothe’s Hololo area has ended with Hololo Kimberlite Mine (Pty) Ltd finally being granted a license. The fight which saw the company lose huge sums of money in litigation costs and struggle to retain investors ended with Hololo Kimberlite being awarded a license by the Ministry of Mining on February 27. The authorisation ends on February 27, 2022. The company had to fight tooth and claw to reclaim the operating license which they were deceitfully shorn of in 2012.
Hololo Kimberlite was one of the companies that submitted bids for the tender to prospect for diamonds in the area, but the tender was subsequently wrongfully awarded to Qholaqhoe Holdings. The license, however, expired in 2015 before the company conducted any prospecting at the site due to a series of court cases. Four other companies Phelisang le Phelisane, Letlaka, Tlhako and Balisa tried but failed to claim the license.
In 2018, before the Public Accounts Committee (PAC), Hololo Kimberlite Mine had clearly articulated that their application documents were tempered with by the Ministry of Mining in 2012 hence they lost the tender to Qholaqhoe Holdings. It emerged that the then Principal Secretary (PS) in the ministry, Clement Lerotholi, had a hand in the fraudulent awarding of the license to Qholaqhoe Holdings. Lerotholi was later found guilty following investigations by the Directorate on Corruption and Economic Offences (DCEO).
During the lengthy legal battle, Hololo Kimberlite was sinking financially and was later forced to source funds from citizens of goodwill, including church members in order to continue with the battle. The bankruptcy was mainly because investors from South Africa decided to withhold their funds, indicating they had lost business interests in Lesotho because of “undue political interference” in the matter.
At this point, the investors who had pledged to invest a whooping US$15 million (over M200 million) in the project decided to pull back funding as legal battles dragged on in court. Now the local company can boast rights to fully operate in the 25km squared area for two years with the license open for renewal for an additional year – provided the Commissioner of Mines is satisfied that the licensee has worked in accordance with the work plan.
“…now, therefore, the minister hereby grants to the holder the exclusive rights to prospect for diamonds in the license area for a period of 2 years commencing on 27th February, 2020, and ending on 27th February, 2022,” the license states. This week, the mine executive team said in an interview with Public Eye that work will commence with the minimum expenditure of $1 000 000 – down from the original US$15 that had been pledged by investors.
Popular South African entrepreneur, Gerrie Oosthuizen, is the financial backer of the multi-million mining project. He has 29 years’ experience in diamond mining in countries such as Namibia, Tanzania and Democratic Republic of Congo (DRC). “It is true that operation could have started a long time ago, a lot of time has been wasted but we are happy that finally our dreams will come true. We are in possession of a license and work on the site will commence next week.
All our machinery is ready, we had a meeting with the investor last week Wednesday and we are ready to go,” the Executive Director of the mine Sekholomi Mohlobohi confirmed in an interview with Public Eye on Monday. The license states that Hololo Kimberlite Mine shall commence prospecting operations within three months from the date of issue of license in accordance with a workplan approved by the Commissioner. The 73-year-old Mohloboli, who is also a pastor in his church, went on to express his appreciation to the government of Lesotho through the Ministry of Mining, the DCEO as well as his congregation for unrelenting and continued support during the trying times the company went through.
Similar sentiments were echoed by company secretary, Tumisang Mpesi, who highlighted that while a lot of energy has been spend on court cases, it was not too late to “start operations that will in the long run benefit hundreds of Basotho.” “This is a great moment for us as a company and Basotho in general, because we have been running for so many years trying to prove to the government that we are the deserving company to operate in the area,” Mpesi added. The US$1 million investment has been broken down into five stages for the two-year period.
A total of US$50 000 will be used in the first stage for the geological assessment and determination of the kimberlite resource tonnage, value per carat and valuation of the project; the company will further investigate the possibility of alluvial gravels in the river that crosses the concession for possible diamond indicators. This alluvial operation that will run concurrently with the kimberlite operation, the company said, could form a vital source of income for the project if any such diamond gravels are present.
Another US$150 000 will be used in the second stage where the validation exploration drilling works and engineering pre-feasibility works will commence. In this phase, all the outstanding information that will be required for engineering designs and to undertake the generation and investigation of engineering alternatives as well as engineering optimisations, will be compiled.
“So the US$ 1 million is enough despite the fact that had we started the operation in the previous years, the total investment in the project could have been US$15 million. Our investors are aware of the industry and its challenges and therefore we are highly optimistic that our project will be successful,” Mohloboli further added. In the third stage, a total of US$300 000 will be used for the topographical surveys, mining pit designs, geotechnical designs as well as hydrology studies, infrastructure and many other related issues.
Stage four will focus on treatment plant selection and a total of US$20 000 will be used while an estimated US$200 000 will be used in stage five which will now include the mining and processing of kimberlite in the form of a bulk sample. This sampling exercise, the company says, comprises regularly spaced pits in the pipe. It is intended that each one of the pits will yield sufficient carats for evaluation.
The detailed planning of the bulk sampling exercise as well as the continuation of mining operations thereafter will be completed by specialist mining consultants. The two-year license is further clear that failure to keep the operations continuous will lead to cancellation of the license. Similarly, failure to commence prospecting activities within six months after being granted a license will also lead to the minister cancelling the license.
