Johannesburg — LETSENG Diamonds said yesterday it was considering doubling the capacity at its Lesotho mine to 100000 carats a year.

A new plant would be commissioned by 2007, it said. The mine, which came into production in April last year after it had been idle since De Beers abandoned the project in 1982, was known for its exceptionally large stones.

The announcement came shortly after the company recovered a 186 carat stone, its ninth stone of more than 100 carats found since operations began.

Letseng is the only operational diamond mine in Lesotho.

But according to a government official, three other companies were pursuing diamond mining enterprises in the country.

One such project is Liqhobong, which is under construction and is expected to begin production by the middle of this year.

Asked how it would finance the mine's production increase, Letseng CEO Keith Whitelock said it was looking at various options, including a public listing.

Letseng, hailed by the government as a symbol of a diamond mining resurgence in Lesotho, is a joint venture between Matodzi Resources and the Kebble family's JCI. The Lesotho government holds 24% and also earns royalties.

JCI acquired a 76% stake after the government published a tender in 1996 that expressed a preference for a South African company to develop the mine. It then sold off half of that stake to Matodzi.

Matodzi, which is 70% owned by black SA-based investors and is the largest shareholder with a 38% stake, is also seeking mining rights in Angola and Namibia.

For the full year ending March next year, the Letseng mine produced 37000 carats at an average value of $1200 a carat, and posted revenue of $44,4m.