MASERU – The coronavirus pandemic that has swept the globe has had a notable impact on the country’s mining sector, with new developments unfolding almost every day. Lesotho went into a strict lockdown on March 29, in an attempt to prevent the spread of the coronavirus. The lockdown confines all but essential workers to their homes, though journeys to buy groceries or seek medical attention are allowed. All restaurants, fast-food outlets, pubs, bars and taverns have been shut down and transportation of alcohol banned.
Four days before the lockdown started, the United Kingdom-based Firestone Diamonds announced that it would suspend operations at its Liqhobong mine for at least three weeks to safeguard its workforce and the surrounding community from the coronavirus epidemic. Firestone Diamonds said only essential care and maintenance services and security would not be suspended. Liqhobong mine, located in Botha-Bothe, is partly owned by Firestone Diamonds through a 75 percent shareholding. The government owns the residual shares.
This week, in an unprecedented turn of events, Firestone Diamonds announced that it would not resume operations at Liqhobong immediately after the lockdowns ends on April 21. It said it was in the best interest of all stakeholders to “rather preserve the limited mine life at Liqhobong Mine and the limited cash resources of the group for as long as possible to ensure the mine can start up again when the market recovers”, which the company’s directors believe will take at least 12 months.
This announcement came just two days after Liqhobong told its employees that the coronavirus outbreak had impacted its businesses and “indeed the global diamond industry very badly” and was therefore considering retrenchments. “The impact of the onset of the coronavirus on the global diamond market has been dramatic and severe,” Firestone Chief Executive Officer Paul Bosma said on Thursday.
Bosma said as a result of various country lockdowns around the world, including Belgium and India, with accompanying travel bans, many diamond producers were unable to physically sell their diamonds. “These include Firestone’s subsidiary, Liqhobong Mining Development Company (LMDC) Pty Ltd,” he said. He indicated that it was uncertain when Liqhobong would next be able to sell its diamonds.
“The price LMDC can likely expect to achieve for its diamonds is unknown and the length of time it might take for the diamond market to recover from the coronavirus pandemic, and specifically to the level where LMDC can operate sustainably is unknown,” Bosma said.
Liqhobong is not the only mine in the country whose business has been negatively affected by the outbreak of the coronavirus. Letšeng Diamond Mine, the highest dollar per carat kimberlite diamond mine in the world, has also been affected and has, as a result, implemented the cancellation of allowances for their staff which will be effective in the April 2020 payroll.