Gem Diamonds Receives 10-Year Extension for Letšeng Mining Lease
The mining lease for the Letšeng mine has been renewed by the Government of the Kingdom of Lesotho for a further period of 10 years, Gem Diamonds announced in a statement issued late last week. This is the maximum period permissible at any time under the 2005 Mines and Minerals Act.
The two side concluded their negotiations and the terms of the renewed mining lease were agreed with the Lesotho Mining Board and include the following material terms:
- The lease is renewed with immediate effect for a period of 10 years (the maximum period allowed under the 2005 Mines and Minerals Act – the Act) with an exclusive right granted to Letšeng to renew the mining lease for a further period of 10 years
- The respective shareholding in the Letšeng mine remains unaltered
- The royalty payable in respect of diamonds sold by Letšeng is increased from 8% to 10% (the current stipulated rate under the Act) with effect from 3 October 2019
- The royalty may be remitted in whole or in part in the event that Letšeng embarks upon any material capital project
- The number of work permits which may be granted to Letšeng in respect of foreign nationals increases in order to fill any skills gap at the mining operations
Gem Diamonds' CEO, Clifford Elphick commented, "Gem Diamonds is proud of our long-standing partnership with the Government and the people of Lesotho. The mining lease renewal will allow the Letšeng mine to continue to make a very significant economic and social contribution to the people of Lesotho. Gem Diamonds would like to thank the Government of Lesotho for its ongoing support and we look forward to continuing the shared value creation long into the future."