Lesotho: Dealers Granted Diamond Amnesty

The Ministry of Mining is planning to give all diamond dealers an amnesty to hand in their inventory to the government before it starts issuing licences for small scale miners.

Commissioner of Mines Pheello Tjatja told the Lesotho Times on Tuesday that the amnesty is meant to give all persons currently holding diamonds illegally an opportunity to sell them with government assistance.

Many diamond traders are currently stuck with unsold inventory of rough diamonds because they are required to disclose the source as per the Kimberly Certification process. Buyers across the world only purchase diamonds that have authentic documentation indicating their source.

The ministry recently informed the dealers of its plans to permit small scale diamond mining and dealing but said diamonds on hand must be cleared first.

Mr Tjatja said the process is meant to help the government come up with a proper source management system to avoid corruption.

"We want to avoid false declarations of diamonds when small-scale miners eventually begin operations," Mr Tjatja said.

"Failure to clear these diamonds could put us at the risk of being misinformed about the actual productivity of small-scale mining operations, which would negatively affect how they are developed going forward."

He said dealers have been unable to sell their diamonds because they could not disclose their sources.

"The ministry must know the source of the dealers' diamonds before exporting them for auctioning. It's impossible for us to export diamonds whose source we are unaware of and this is why we want them declared even when they do not know the source so that we can assist them.

"The ministry will determine how to dispose of these diamonds but ideally, they will be cut and polished locally depending on their quality, and when we export them, they will be regarded as state property rather than a miner's."

He said the ministry's legal team was developing the regulations that would guide the procedures that the dealers must follow in handing in their diamonds. Once they have completed the regulations, they will be tabled to cabinet.

Meanwhile, diamond dealers have welcomed the government's decision saying it would benefit locals.

Chairperson of the Lesotho Diamonds Association, Michael Molefe, said the move was positive after many years of diamonds diggers and dealers struggling to get the recognition they deserved.

He said this was the culmination of long-term efforts that the association has consistently lobbying for the government to allow small scale miners to participate significantly in the mining sector.

Currently, diamond mining is limited to large foreign investments with the requisite financial muscle due to capital intensive nature of the business. The government as the local shareholder holding minority free carry shares in four of the existing large-scale mining operations.

"This is a positive move that we have been awaiting for a long time.

"This can only be good for the country as allowing locals to enter the mining industry will create significant jobs and increase revenue generation for the government," Mr Molefe said.

He said attracting international buyers to Lesotho would be easy because of the abundance of good quality diamonds.

"We are confident that the decision to sell the diamonds locally will be successful due to the good reputation that our diamonds have garnered globally due to their high quality."

He said the local trading would also increase the number of tourist arrivals in the country.

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